Following termination or expiration of the Degree Wellness agreement, what is the geographic radius within which the non-competition covenant applies?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
- (a) Non-Competition. During the Agreement Term, Licensed Provider will not, 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 the Studio. Licensed Provider's duties and obligations under this Section 10.3(a) shall survive for two (2) years following any termination or expiration of this Agreement; provided, however, that following such termination or expiration of this Agreement, this covenant shall only apply with respect to a competitive business that has a place of business located within a five (5) mile radius of the location of the Premises.
Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 63–66)
What This Means (2025 FDD)
According to Degree Wellness's 2025 Franchise Disclosure Document, a franchisee is subject to a non-competition covenant for two years following the termination or expiration of their franchise agreement. This covenant restricts the franchisee from engaging in any competitive business within a five-mile radius of the original Degree Wellness location.
This means that after leaving the Degree Wellness system, a former franchisee cannot operate or be involved in a similar business that offers the same or similar products or services as Degree Wellness within that five-mile radius. This restriction aims to protect Degree Wellness's market share and prevent former franchisees from directly competing using knowledge gained during their time with the franchise.
For a prospective franchisee, this non-competition clause is an important consideration. It limits their options if they decide to exit the Degree Wellness system, potentially restricting their ability to work in the same industry within a specific geographic area. Franchisees should carefully evaluate this restriction and its potential impact on their future career plans before investing in a Degree Wellness franchise.