What is the definition of 'competitive businesses' that Degree Wellness franchisees are prohibited from having an interest in?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
You agree that we would be unable to protect the Confidential Information against unauthorized use or disclosure, and would be unable to encourage a free exchange of ideas and information among Degree Wellness franchises, if franchise owners of Degree Wellness franchises were permitted to hold interests in any competitive businesses (as described below).
Therefore, during the Term of this Agreement, neither you, nor any Principal Owner, nor any member of your immediate family or of the immediate family of any Principal Owner, shall directly or indirectly perform services for, or have any direct or indirect interest as an owner, investor, partner, director, officer, employee, manager, consultant, representative, or agent in, any business that offers products or services the same as or similar to those offered or sold at Degree Wellness Studio franchises; provided, however, that the ownership of one percent (1%) or less of a publicly traded company will not be deemed to be prohibited by this Paragraph.
Source: Item 23 — Receipts (FDD pages 66–257)
What This Means (2025 FDD)
According to Degree Wellness's 2025 Franchise Disclosure Document, franchisees are restricted from holding interests in competitive businesses during the term of their agreement. This restriction extends not only to the franchisee but also to any Principal Owner and members of their immediate families.
The FDD defines competitive businesses as any business that offers products or services that are the same as or similar to those offered or sold at Degree Wellness Studio franchises. This includes directly or indirectly performing services for or having any direct or indirect interest as an owner, investor, partner, director, officer, employee, manager, consultant, representative, or agent in such a business.
However, there is an exception: owning one percent (1%) or less of a publicly traded company is not considered a prohibited interest. This non-compete agreement aims to protect Degree Wellness's confidential information and encourage open communication among its franchisees by preventing conflicts of interest. Prospective franchisees should carefully consider these restrictions and ensure they do not violate them, as doing so could lead to a breach of the franchise agreement.