Is the Degree Wellness franchisee permitted to assign the lease to the franchisor?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
thin 10 days of its receipt of notice from Landlord, shall notify Landlord of its intent to cure such default and to assume the Lease. If Franchisor elects to cure the default, it shall cure the default within 30 days of such election or, if the default cannot be reasonably cured within such 30-day period, then Franchisor will commence and proceed to cure the default within such time as is reasonably necessary to cure the default. If Franchisor elects to assume the Lease, Landlord agrees to recognize Franchisor as the tenant under the Lease and Franchisee will no longer have any rights there under.
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- Franchisee will be permitted to assign the Lease to Franchisor or its affiliates upon the expiration (without renewal) or earlier termination of the Franchise Agreement and the Landlord hereby consents to such assignment and agrees not to impose or assess any assignment fee or similar charge or accelerate rent under the Lease in connection with such assignment, or require Franchisor to pay any past due rent or other financial obligation of Franchisee to Landlord, it being understood that Landlord will look solely to the Franchisee for any rents or other financial obligations owed to Landlord prior to such assignment. Landlord and Franchisee acknowledge that Franchisor is not a party to the Lease and will have no liability under the Lease, unless and until the Lease is assigned to, or assumed by, Franchisor.
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- Except for Franchisee's obligations to Landlord for rents and other financial obligations accrued prior to the assignment of the Lease, in the event of such assignment, Franchisor or any affiliate designated by Franchisor will agree to assume from the date of assignment all obligations of Franchisee remaining under the Lease, and in such event Franchisor or any affiliate will assume Franchisee's occupancy rights, and the right to sublease the Premises, for the remainder of the term of the Lease. In the event of such assignment, neither Franchisor nor any affiliate will be required to pay to Landlord any security deposit.
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- Notwithstanding anything contained in this Lease, Franchisor is expressly authorized, without the consent of the Landlord, to assign the Lease, or to sublet all or a portion of Premises, to an authorized franchisee.
Source: Item 23 — Receipts (FDD pages 66–257)
What This Means (2025 FDD)
According to Degree Wellness's 2025 Franchise Disclosure Document, a franchisee is permitted to assign the lease to Degree Wellness or its affiliates upon the expiration or earlier termination of the Franchise Agreement. In such instances, the landlord consents to the assignment and agrees not to impose any assignment fees or accelerate rent payments. The landlord also agrees not to require Degree Wellness to pay any past due rent or other financial obligations of the franchisee, as the landlord will look solely to the franchisee for any outstanding debts incurred before the assignment.
Furthermore, Degree Wellness has the right to enter the franchisee's business premises to make necessary modifications or alterations to protect the Degree Wellness system and proprietary marks or to cure any default under the Franchise Agreement or the lease. The landlord will not be held responsible for any expenses or damages arising from Degree Wellness's actions in this regard. In the event of the franchisee's default under the lease terms, the landlord must promptly notify Degree Wellness and offer them the opportunity to cure the default and assume the lease in Degree Wellness's name.
If Degree Wellness chooses to cure the default and assume the lease, they must notify the landlord of their intent within 10 days of receiving notice of the default. Degree Wellness then has 30 days to cure the default, or if the default cannot be reasonably cured within that period, they must commence and proceed to cure the default within a reasonable timeframe. If Degree Wellness elects to assume the lease, the landlord agrees to recognize Degree Wellness as the tenant, and the franchisee will no longer have any rights under the lease.
This arrangement provides Degree Wellness with significant control over the leased premises and ensures the continuity of the Degree Wellness business even in cases of franchisee default or termination. For a prospective franchisee, this highlights the importance of maintaining a good relationship with both the franchisor and the landlord, as well as understanding the conditions under which Degree Wellness might step in to take over the lease.