Does the Degree Wellness franchise agreement require specific language in ownership documents regarding transfer restrictions?

According to Degree Wellness's 2025 Franchise Disclosure Document, the franchise agreement does mandate that specific language reflecting transfer restrictions be included in ownership documents. Specifically, the formal partnership, corporation, or other formation documents, along with stock certificates or partnership units, must contain a legend that reflects the transfer restrictions outlined in Paragraph 14.4 of the agreement.

This requirement ensures that all owners, including minority owners, are aware of the limitations on transferring their interests in the Degree Wellness franchise. This is particularly important because transfers that would result in a single transferee or affiliated group holding more than 25% ownership require the franchisor's advance written approval. By including this legend, Degree Wellness aims to maintain control over the ownership structure and ensure compliance with the franchise agreement's transfer provisions.

For a prospective franchisee, this means that setting up the legal structure for their Degree Wellness franchise requires careful attention to detail. The franchisee must ensure that all relevant ownership documents include the mandated language regarding transfer restrictions. Failure to comply with this requirement could potentially lead to issues with the franchisor and may impact the ability to transfer ownership in the future. Franchisees should consult with legal counsel to ensure full compliance with this provision.