To what extent are transfer fees collectable by Degree Wellness?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
ffer. If Franchisor elects to purchase the seller's interest, closing on such purchase must occur by the later of: (a) the closing date specified in the third party offer; or (b) within 60 days from the date of notice to the seller of Franchisor's election to purchase. Franchisor's failure to exercise the option described in this Section 14.4(f). shall not constitute a waiver of any of the transfer conditions set forth in this Article 14.5.
- 14.5 Conditions for Approval of Transfer. If you and your Principal Owners are in full compliance with this Agreement, both monetary and otherwise, we will not unreasonably withhold our approval of a Transfer that meets all the applicable requirements of this Section 14. The Proposed New
Owner must be of good moral character and otherwise meet our then applicable standards for Degree Wellness Studio franchisees. For any proposed Transfer, in addition to waiving our right of first refusal, all of the following conditions must be met before or at the time of the Transfer:
- a. in our belief and judgment, the Proposed New Owner must have sufficient business experience, aptitude, and financial resources to operate the Franchise;
- b. you must pay any amounts owed for purchases from us and our affiliates, and any other amounts owed to us or our affiliates which are unpaid, including any Initial Franchisee Fee, Continuing Franchise Fees, and Fund contributions;
- c. the Proposed New Owner's directors and such other personnel as we may designate must have successfully completed our Initial Training program and shall be legally authorized and have all licenses necessary to perform the services offered by the Franchise. The Proposed New Owner shall be responsible for any wages and compensation owed to, and the travel and living expenses (if the Initial Training program is not held virtually in the future, and including all transportation costs, room, board and meals) incurred by, the attendees who attend the Initial Training program;
- d. if your lease for the Premises requires it, the lessor must have consented to the assignment of the lease of the Premises to the Proposed New Owner;
- e.
Source: Item 23 — Receipts (FDD pages 66–257)
What This Means (2025 FDD)
The 2025 Franchise Disclosure Document outlines the conditions under which Degree Wellness can approve a transfer of ownership. Degree Wellness will not unreasonably withhold approval of a transfer if the franchisee and their Principal Owners are in full compliance with the franchise agreement, both monetarily and otherwise, and the transfer meets all applicable requirements.
Specifically, the proposed new owner must meet Degree Wellness's standards for franchisees, possessing sufficient business experience, aptitude, and financial resources. Prior to the transfer, the franchisee must settle all outstanding payments owed to Degree Wellness and its affiliates, including any Initial Franchise Fee, Continuing Franchise Fees, and Fund contributions. Additionally, the proposed new owner's directors and designated personnel must successfully complete Degree Wellness's Initial Training program and hold all necessary licenses to perform the services offered by the franchise.
Degree Wellness also retains a right of first refusal. If a franchisee receives a legitimate offer to purchase their interest, Degree Wellness has the option to match that offer and purchase the franchise itself. If Degree Wellness declines to exercise this option, it does not waive any of the transfer conditions outlined in the franchise agreement. Any material changes to the terms of an offer prior to closing are considered a new offer, subject to Degree Wellness's right of first refusal.