To what are the Assignee's obligations subordinate under the Degree Wellness agreement?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
Degree Wellness will perform its obligations under this Agreement if you are in full compliance with all or your duties and obligations to Degree Wellness under this Agreement and the Operations Manual (including any documents incorporated therein).
If you are not in such compliance, we may, in our sole judgment, do any or all of the following until you fully correct the breach or default or Degree Wellness terminates this Agreement:
a. deny you access to the Degree Wellness website or Intranet;
b. remove your Franchised Business from the Franchised Business locator page and/or remove your interior pages, on the Degree Wellness Website;
c. remove your Franchised Business from the list of Franchised Businesses to which inquiries are referred;
d. remove your Franchised Business from the list of Franchised Businesses that are entitled to Degree Wellness-related discounts from approved vendors; and/or
e. remove your Franchised Business from the list of Franchised Businesses that are approved to participate in national or other alliance programs.
Degree Wellness may take any or all of these actions in addition to or instead of giving you notice of default and/or termination under this Agreement. You acknowledge and agree that Degree Wellness's withholding of performance services in accordance with this Section 15.4 will not constitute a breach of this Agreement and/or a defense to the enforcement by us of any provision of this Agreement, including the right to receive payment of Continuing Franchise Fees as provided in Section 6.2. You also acknowledge and agree that, should we choose to withhold performance rather than terminate this Agreement, Degree Wellness's failure to exercise its right to terminate this Agreement will in no way constitute a waiver of its subsequent right to terminate this Agreement for the specified default or for any other default or to exercise any other remedies available to us under this Agreement, at law, or in equity.
Source: Item 23 — Receipts (FDD pages 66–257)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, the Degree Wellness franchise agreement outlines specific scenarios regarding the termination of the agreement and the subsequent obligations of both the franchisee and franchisor. Section 15.4 details that Degree Wellness's obligations to the franchisee are contingent upon the franchisee's full compliance with all duties and obligations outlined in the agreement and the Operations Manual. This means that Degree Wellness can withhold certain support and services if the franchisee is not meeting these requirements. These stipulations ensure that Degree Wellness can maintain brand standards and operational consistency across all franchise locations.
Specifically, if a Degree Wellness franchisee fails to comply with their obligations, the franchisor has the right to deny access to the Degree Wellness website or Intranet, remove the franchise from the business locator page, remove the franchise from lists for referred inquiries or vendor discounts, and exclude the franchise from national alliance programs. These actions can be taken until the franchisee corrects the breach or default, or until Degree Wellness terminates the agreement. This provision protects Degree Wellness by allowing them to distance themselves from underperforming or non-compliant franchises, which could negatively impact the brand's reputation.
The FDD states that Degree Wellness's decision to withhold performance services will not be considered a breach of the agreement, nor will it impede their ability to enforce any provision of the agreement, including the right to receive Continuing Franchise Fees. Furthermore, if Degree Wellness chooses to withhold performance rather than terminate the agreement, this does not waive their right to terminate the agreement later for the same or any other default. This clause ensures that Degree Wellness retains maximum flexibility in addressing franchisee non-compliance, allowing them to choose the most appropriate course of action without forfeiting future options.
For a prospective Degree Wellness franchisee, this means that maintaining full compliance with the franchise agreement and Operations Manual is crucial. Failure to do so can result in significant operational and marketing disadvantages, as well as potential financial repercussions. The franchisee should be aware of the specific compliance requirements and ensure they have the resources and commitment to meet them consistently. Understanding these conditions is essential for a successful and mutually beneficial relationship between the franchisee and Degree Wellness.