Does a Degree Wellness franchisee have an obligation to reimburse the franchisor?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
If you do not take the actions we request within 10 days after notice from us, we have the right to enter the Premises and make the required changes at your expense, and you agree to reimburse us for those expenses on demand.
- 16.1 Payment of Amounts Owed to Degree Wellness. You agree to pay us within five (5) days after the effective date of termination or expiration of the Franchise, or any later date that the amounts due to us are determined, all amounts owed to us or our affiliates which are then unpaid including, without limitation, any unpaid Initial Franchise Fee, any unpaid Continuing Franchise Fees, and any termination fee, damages, costs or expenses owed by you pursuant to Section 15.3, together with any audit costs and expenses owed by you pursuant to Section 13.2.
If Franchisor is required to enforce the guaranty provided for under this Section in a judicial or arbitration proceeding, and prevail in such
proceeding, then Owner agrees that Franchisor will be entitled to reimbursement of its costs and expenses, including, but not limited to, reasonable accountants', attorneys', attorneys' assistants', arbitrators' and expert witness fees, costs of investigation and proof of facts, court costs, other litigation expenses and travel and living expenses, whether incurred prior to, in preparation for or in contemplation of the filing of any such proceeding.
Source: Item 23 — Receipts (FDD pages 66–257)
What This Means (2025 FDD)
According to Degree Wellness's 2025 Franchise Disclosure Document, a franchisee may have to reimburse the franchisor under certain circumstances. If the franchisee fails to take actions requested by Degree Wellness within 10 days after notice, Degree Wellness has the right to enter the premises and make required changes at the franchisee's expense. In this case, the franchisee agrees to reimburse Degree Wellness for those expenses on demand.
Additionally, upon termination or expiration of the franchise agreement, the franchisee is obligated to pay all outstanding amounts owed to Degree Wellness or its affiliates. This includes unpaid initial franchise fees, continuing franchise fees, termination fees, damages, costs, and expenses. These payments must be made within five days of the termination or expiration date, or any later date when the amounts due are determined. The franchisee may also be responsible for audit costs and expenses as outlined in another section of the agreement.
Furthermore, if the owner of the franchise breaches any provision of the Franchise Agreement, they may be required to pay Degree Wellness all damages resulting from the breach. This includes compensatory, incidental, consequential, and lost profits damages, along with interest, costs, and reasonable attorneys' fees. If Degree Wellness is required to enforce a guaranty in a legal proceeding and prevails, the owner agrees to reimburse Degree Wellness for all costs and expenses, including accountants' and attorneys' fees.