Does the Degree Wellness franchise agreement require Principal Owners to retain a controlling interest after a transfer to a family member?

According to Degree Wellness's 2025 Franchise Disclosure Document, the franchise agreement addresses the transfer of ownership interests, including transfers to family members. Specifically, Degree Wellness will not unreasonably withhold consent to a transfer of interest by a Principal Owner to a member of their immediate family. However, this is conditional on all Principal Owners together retaining a "controlling interest," which is defined as the minimum ownership percentage listed in Exhibit 2 of the franchise agreement. Degree Wellness also reserves the right to impose reasonable conditions on the transfer as a requirement for their consent.

This means that while a Principal Owner can transfer their interest to a family member, the remaining Principal Owners must collectively maintain the minimum ownership percentage to retain control of the franchise. This provision ensures that the core leadership and management of the Degree Wellness franchise remain stable and in the hands of the original, approved owners.

For a prospective Degree Wellness franchisee, this clause has significant implications. It allows for succession planning within families but also protects the franchisor's interests by preventing a complete transfer of control to individuals who may not have been initially vetted and approved. Franchisees should carefully review Exhibit 2 to understand the specific minimum ownership percentages required to maintain a controlling interest and discuss any potential transfer plans with Degree Wellness to ensure compliance with these requirements.