Is the Degree Wellness franchisee required to indemnify Degree Wellness for taxes levied against the franchisee?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
ent. All references to "this Agreement," the "Operations Manual" or the "Standards" include all such mandatory specifications, programs, standards, and operating and management procedures. We will not, however, control or try to influence your or your
employee's exercise of professional and/or medical judgment, treatment protocols, employee decisions or relationships with patients.
10.6 Compliance with Laws and Good Business Practices.
- a. You agree to secure and maintain in force in your name all required licenses, permits and certificates relating to the operation of the Franchise. You also agree to operate the Franchise in full compliance with all applicable laws, ordinances, and regulations, including without limitation all government regulations relating to worker's compensation insurance, advertising, unemployment insurance, the practice of health care in your state, and withholding and payment of federal and state income taxes, social security taxes, and sales taxes.
- b.
Source: Item 23 — Receipts (FDD pages 66–257)
What This Means (2025 FDD)
According to Degree Wellness's 2025 Franchise Disclosure Document, franchisees are responsible for operating their franchise in compliance with all applicable laws, ordinances, and regulations. This includes, without limitation, government regulations relating to worker's compensation insurance, advertising, unemployment insurance, the practice of health care in their state, and withholding and payment of federal and state income taxes, social security taxes, and sales taxes.
Additionally, the franchisee is responsible for all loss or damage and contractual liability to third persons originating from or in connection with the operation of the Franchise, and for all claims or demands for damages to property or for injury, illness or death of persons directly or indirectly resulting therefrom. The franchisee agrees to defend, indemnify, and hold Degree Wellness harmless from any such claims, loss, or damage, and this indemnity survives the termination or expiration and non-renewal of the agreement.
While the franchisee is explicitly responsible for paying their own taxes and must indemnify Degree Wellness against certain liabilities, the FDD does not specifically state that the franchisee must indemnify Degree Wellness for taxes levied against the franchisee. However, the broad indemnification clause could potentially be interpreted to include tax-related liabilities if they arise from the franchisee's operation of the business and cause damage or loss to Degree Wellness. A prospective franchisee should seek clarification from Degree Wellness regarding the scope of this indemnification clause and consult with a legal professional to fully understand their obligations.