What are the consequences if a Degree Wellness franchisee transfers the agreement or franchise interest without complying with Section 14?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
- c. you or your Principal Owners assign or Transfer this Agreement, any Interest, the Franchise, or assets of the Franchise without complying with the provisions of Section 14;
15. TERMINATION OF THE FRANCHISE.
- 15.1 Event of Default. Subject to applicable law, you will be deemed to be in default under this Agreement, and we will have the right to terminate this Agreement effective upon delivery of notice of termination to you, subject only to any right to cure to the extent expressly set forth below or mandated pursuant to applicable law, if:
Source: Item 23 — Receipts (FDD pages 66–257)
What This Means (2025 FDD)
According to Degree Wellness's 2025 Franchise Disclosure Document, if a franchisee assigns or transfers the Franchise Agreement, any interest, the franchise, or assets of the franchise without complying with the provisions of Section 14, it will be considered an event of default. This gives Degree Wellness the right to terminate the Franchise Agreement, effective immediately upon delivery of a termination notice to the franchisee. This termination is subject to any applicable cure rights provided by law or expressly stated in the agreement.
This means that a Degree Wellness franchisee must adhere strictly to the transfer conditions outlined in Section 14 of the agreement. Failure to obtain proper approval or meet the specified requirements can lead to the termination of the franchise agreement. The franchisee would then lose the right to operate the Degree Wellness franchise and would likely be subject to other post-termination obligations, such as those related to confidential information and non-competition.
It is important for prospective Degree Wellness franchisees to carefully review Section 14 of the Franchise Agreement and understand all requirements for transferring ownership or interests in the franchise. Franchisees should also seek legal counsel to ensure they fully understand the implications of non-compliance and the potential for termination of the agreement. This is a fairly standard clause in most franchise agreements, as franchisors want to maintain control over who operates their branded locations.