Is a Degree Wellness developer allowed to transfer any rights or obligations under the Development Agreement without prior written consent from Degree Wellness?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Development Agreement | Summary | |
|---|---|---|---|
| during the Development Period (including any monetary default) and you fail to cure such default within 30 days of receiving notice. | |||
| h. | "Cause" defined – non-curable defaults | Section 6.2 | We may terminate the Development Agreement if you cease to actively engage in development activities in the Site Selection Area or otherwise abandon your development business for three consecutive months, or any shorter period that indicates an intent by you to discontinue development of the Studios within the Site Selection Area; you become insolvent or are adjudicated bankrupt, or if any action is taken by you, or by others against the you, under any insolvency, bankruptcy or reorganization act, or if you make an assignment for the benefit or creditors or a receiver is appointed by you; and any Franchise Agreement that is entered into in order to fulfill your development obligations under the Development Agreement is terminated or subject to termination by us, pursuant to the terms of that Franchise Agreement. |
| i. | Developer's obligations on termination/ nonrenewal | Not Applicable | Not Applicable |
| j. | Assignment of contract by franchisor | Section 8 | We have the right to transfer or assign the Development Agreement and all or any part of our rights, duties or obligations to any person or legal entity without your consent. |
| k. | "Transfer" by developer – defined | Section 8 | Any transfer in you (if you are an entity) or your rights/obligations under the Development Agreement. |
| l. | Franchisor's approval of transfer by developer | Section 8 | You may not transfer any rights or obligations under the Development Agreement without our prior written consent. |
Source: Item 17 — Renewal, Termination, Transfer, and Dispute Resolution (FDD pages 49–59)
What This Means (2025 FDD)
According to Degree Wellness's 2025 Franchise Disclosure Document, a developer is not allowed to transfer any rights or obligations under the Development Agreement without obtaining prior written consent from Degree Wellness. This requirement ensures that Degree Wellness maintains control over who is developing their franchise locations and that any potential new developers meet their standards.
This provision is typical in franchising, as franchisors want to carefully vet and approve anyone taking over development responsibilities. This protects the brand and ensures consistent quality and adherence to the franchise's standards. Without this clause, a developer could potentially assign their rights to an unqualified party, which could harm the Degree Wellness brand and system.
For a prospective Degree Wellness developer, this means that if they ever wish to transfer their development rights or obligations to someone else, they must first seek and obtain written approval from Degree Wellness. This process likely involves submitting information about the proposed transferee for Degree Wellness to review and approve. It is important for developers to understand this restriction and factor it into their long-term plans.