What constitutes abandonment of the Degree Wellness franchise, leading to a default?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
- 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:
- b. you abandon, surrender, transfer control of, lose the right to occupy the Premises of, or do not actively operate, the Franchise, or your lease for or purchase of the location of the Franchise is terminated for any reason;
Source: Item 23 — Receipts (FDD pages 66–257)
What This Means (2025 FDD)
According to Degree Wellness's 2025 Franchise Disclosure Document, a franchisee will be considered in default of their franchise agreement if they abandon the franchise. Specifically, default occurs if the franchisee surrenders, transfers control of, loses the right to occupy the premises, or does not actively operate the Degree Wellness franchise. Additionally, default occurs if the lease for or purchase of the location of the franchise is terminated for any reason.
This means that a Degree Wellness franchisee must maintain active operation of their studio at its designated location. Any cessation of operations, whether voluntary or involuntary (such as eviction), can be construed as abandonment and trigger the franchisor's right to terminate the agreement.
For a prospective franchisee, this underscores the importance of securing a stable location and maintaining continuous business operations. Franchisees should carefully consider the terms of their lease or property purchase agreement to mitigate the risk of losing their location. They should also have a plan to ensure continuous active operation of the Degree Wellness studio to avoid any claim of abandonment.