When is the Development Fee payable to Degree Wellness?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
THIS AMENDMENT TO DEVELOPMENT AGREEMENT ("Amendment") dated , is intended to be a part of, and by this reference is incorporated into that certain Development Agreement (the "Development Agreement") dated, by and between Degree Wellness Franchise, LLC ("Franchisor"), a Delaware limited liability company, with its principal office in Jacksonville, Florida, and ("you" or "Developer"). Defined terms contained in the Development Agreement shall have the identical meanings in this Amendment. Item 2 under the development agreement opens. above. of the Franchise Disclosure Document is supplemented by the following: Based upon the franchisor's financial condition, the Maryland Securities Commissioner has required a financial assurance. Therefore, all initial fees and payments owed by franchisees shall be deferred until the franchisor completes its pre-opening obligations under the franchise agreement. "In addition, all development fees and initial payments by area developers shall be deferred until the first franchise IN WITNESS WHEREOF, the parties have executed this Amendment on the date first shown DEVELOPER FRANCHISE, LLC DEGREE WELLNESS
WASHINGTON AMENDMENT TO DEVELOPMENT AGREEMENT
Source: Item 23 — Receipts (FDD pages 66–257)
What This Means (2025 FDD)
The 2025 Degree Wellness Franchise Disclosure Document includes amendments to the Development Agreement for Maryland, South Dakota, and Washington. These amendments state that all development fees and initial payments by area developers in those states are deferred until the first franchise is opened under the development agreement. This deferral is specifically tied to the franchisor's financial condition and is required by the Maryland Securities Commissioner.
For prospective Degree Wellness area developers in Maryland, South Dakota, and Washington, this means they will not be required to pay the development fees or initial payments until they open their first franchise location. This can significantly reduce the initial financial burden on developers in these states, allowing them more time to secure financing and prepare for the launch of their first location.
However, it's important to note that this deferral is contingent on Degree Wellness's financial condition. If the franchisor's financial situation improves, the deferral may be lifted, and developers may be required to pay the fees earlier. Additionally, this deferral only applies to Maryland, South Dakota, and Washington; developers in other states may be subject to different payment terms. Prospective developers should carefully review the specific terms of the Development Agreement and any applicable state amendments to understand their payment obligations.
It is also important to note that the standard Development Agreement requires binding arbitration, so any disputes would be handled through that process. Additionally, Degree Wellness requires full implementation of their computer system and software, and failure to do so within specified timeframes can result in additional fees.
Prospective Degree Wellness developers should confirm with the franchisor the current status of the financial assurance requirements and the specific payment schedule for development fees in their state. They should also inquire about any potential changes to these terms based on the franchisor's financial condition.