When does the Degree Wellness Development Agreement expire if not terminated earlier by the Franchisor?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
- 6.1 This Agreement will begin on the Effective Date and, unless earlier terminated by Franchisor, will expire on the earlier of: (i) the last day of the calendar month that the final Studio is required to be opened and operating under the Development Schedule; or (ii) the date Developer actually opens the last Studio that Developer is granted the right to open under this Agreement. Upon expiration or termination of this Agreement for any reason, Developer will not have any territorial rights other than those that might be granted in connection with a "Protected Territory" associated with a Studio that Developer has opened and begun operating as of the date this Agreement is terminated or expires (if and as such rights are granted by Franchisor under the respective Franchise Agreement(s) that Developer entered into for such Studios).
- 6.2 Franchisor will have the right, at its option, to terminate this Agreement and all rights granted to Developer hereunder, without affording Developer any opportunity to cure such default, effective upon written notice to Developer, upon the occurrence of any of the following events: (i) if
Developer ceases to actively engage in development activities in the Site Selection Area or otherwise abandons its development business for three consecutive months, or any shorter period that indicates an objective intent by Developer to discontinue development of the Studios within the Site Selection Area; (ii) if Developer becomes insolvent or is adjudicated bankrupt, or if any action is taken by Developer, or by others against the Developer, under any insolvency, bankruptcy or reorganization act, or if Developer makes an assignment for the benefit of creditors or a receiver is appointed by the Developer; (iii) if Developer fails to meet its development obligations under the Development Schedule for any single Development Period, and fails to cure such default within 30 days of receiving notice thereof; and (iv) if any Franchise Agreement that is entered into in order to fulfill Developer's development obligations under this Agreement is terminated or subject to termination by Franchisor, pursuant to the terms of that Franchise Agreement.
Source: Item 23 — Receipts (FDD pages 66–257)
What This Means (2025 FDD)
According to Degree Wellness's 2025 Franchise Disclosure Document, the Development Agreement begins on the Effective Date and expires unless terminated earlier by Degree Wellness. The expiration will occur on the earlier of two conditions: either the last day of the calendar month when the final studio is required to be opened per the Development Schedule, or the date the developer actually opens the last studio they were granted the right to open under the agreement.
This means that the agreement's term is tied to the developer's performance in opening studios according to the agreed-upon schedule. If a developer completes their studio openings ahead of schedule, the agreement expires when the last studio opens. If they lag, the agreement extends until the deadline specified in the Development Schedule.
Upon expiration or termination, the developer loses all territorial rights, except those associated with a "Protected Territory" linked to a studio they have already opened and are operating. This incentivizes developers to open and operate studios to maintain territorial rights. Degree Wellness also retains the right to terminate the agreement under specific conditions, such as ceasing development activities, insolvency, failure to meet development obligations, or termination of any related Franchise Agreement.
Prospective Degree Wellness developers should carefully review the Development Schedule and understand the implications of failing to meet those obligations. They should also consider the conditions under which Degree Wellness can terminate the agreement, as this could impact their investment and territorial rights.