What constitutes an 'Event of Default' that could lead to the termination of the Degree Wellness franchise agreement?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
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:
a. you do not develop or open the Franchise, or you (or any individuals required to attend) fail to attend and/or successfully complete any required initial training or subsequent mandatory training, in accordance with all terms and conditions (including, without limitation, time limits) provided for in this Agreement;
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;
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;
d. you are adjudged a bankrupt, become insolvent or make a general assignment for the benefit of creditors, or you fail to satisfy any judgment rendered against you for a period of 30 days after all appeals have been exhausted;
e. you use, sell, distribute or give away any services or products, or use any patient referral or marketing service, that has not been formally approved by us in writing and in advance for your specific Franchise or for the System as a whole;
f. you or any of your Principal Owners are convicted of or plead no contest to a felony or are convicted or plead no contest to any crime or offense that is likely to adversely affect the reputation of Degree Wellness, the Franchise, and/or the goodwill associated with the Marks, or otherwise engage in any dishonest, unethical, or other conduct that is reasonably likely to reflect materially and unfavorably on the goodwill or reputation of your Franchised Business, the Marks or the System;
g. you or any of your employees violate any health or safety law, ordinance or regulation, or operate the Franchise in a manner that presents a health or safety hazard to your customers or the public;
Source: Item 23 — Receipts (FDD pages 66–257)
What This Means (2025 FDD)
According to Degree Wellness's 2025 Franchise Disclosure Document, several events can trigger a default and potential termination of the franchise agreement. These include failing to develop or open the franchise, not attending or completing required training, abandoning the franchise, losing the right to occupy the premises, or failing to actively operate the franchise. Transferring the agreement, any interest in it, the franchise itself, or its assets without adhering to the stipulations outlined in Section 14 also constitutes a default.
Additional events of default include being adjudged bankrupt, becoming insolvent, making a general assignment for the benefit of creditors, or failing to satisfy a judgment against the franchisee for 30 days after all appeals have been exhausted. Furthermore, using, selling, distributing, or giving away any unapproved services or products, or using any unapproved patient referral or marketing service, can lead to termination. Conviction of a felony or any crime that adversely affects Degree Wellness's reputation, or engaging in dishonest or unethical conduct that reflects poorly on the franchise, the marks, or the system, are also grounds for default.
Finally, violating any health or safety laws, ordinances, or regulations, or operating the franchise in a manner that presents a health or safety hazard to customers or the public, can result in the termination of the Degree Wellness franchise agreement. It is important to note that Degree Wellness retains the right to terminate the agreement with notice, subject to any applicable cure rights, if any of these defaults occur.