Is a Degree Wellness franchisee required to pay special compensation for selling to customers outside their Protected Territory?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
You may solicit, accept and sell authorized services and products (including, if permitted under the Franchise Agreement, the services and products under our optional programs) to customers who reside outside your Protected Territory without having to pay any special compensation to us or any other Degree Wellness Studio franchisee. You are permitted to use other channels of distribution, such as the internet, email, social media, telemarketing, or other direct marketing, to make or solicit such sales outside of your Protected Territory. Likewise, Studios owned by us or other Degree Wellness franchisees may solicit, accept, and sell authorized services and products to customers residing in your Protected Territory without having to pay you any special compensation. Studios owned by us and other Degree Wellness franchisees are permitted to use other channels of distribution, such as the internet, email, social media, telemarketing, or other direct marketing, to make or solicit such sales inside of your Protected Territory using the Marks. You may not discount your pricing to attract customers who live in the Protected Territory of another Degree Wellness Studio. Except as otherwise granted pursuant to a Development Agreement, you have no options or rights of first refusal to acquire or purchase additional Degree Wellness Studios. We will not solicit customers from within your Protected Territory and have therefore not established a method compensation for doing so.
Source: Item 12 — Territory (FDD pages 42–44)
What This Means (2025 FDD)
According to Degree Wellness's 2025 Franchise Disclosure Document, a franchisee is not required to pay special compensation for sales to customers outside their protected territory. The FDD specifies that franchisees can solicit, accept, and sell authorized services and products to customers residing outside their Protected Territory without owing any special compensation to Degree Wellness or other franchisees. This includes sales made through channels like the internet, email, social media, telemarketing, or other direct marketing methods.
Conversely, Degree Wellness and other franchisees also have the right to solicit and sell to customers within a franchisee's Protected Territory without paying any compensation to that franchisee. This applies to sales made through various channels, including online platforms and direct marketing. However, a franchisee is not allowed to discount their pricing to attract customers who live in another Degree Wellness Studio's protected territory.
This policy allows Degree Wellness franchisees to expand their customer base beyond their immediate geographic area without incurring additional fees. However, it also means that franchisees may face competition from other Degree Wellness locations, including the franchisor itself, within their own Protected Territory. This aspect highlights the importance of effective marketing and customer service strategies to maintain a competitive edge within the franchise system.