Is the Degree Wellness franchisee (Staffer) required to indemnify Group from any liability related to benefits or withholding requirements for Staffer and Support Personnel?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
xcept to the extent that the
liability of such party exceeds the amount of such insurance coverage. For the avoidance of doubt, all financial liabilities incurred by Staffer on behalf of Group shall remain the sole obligations of Group.
7. INDEPENDENT CONTRACTOR.
In the performance of this Agreement, it is mutually understood and agreed that Staffer and Support Personnel (as defined in Exhibit A) are at all times acting and performing as independent contractors with, and not as employees, joint venturers or lessees of Group. Staffer and Support Personnel shall have no claim under this Agreement or otherwise against Group for workers' compensation, unemployment compensation, sick leave, vacation pay, pension or retirement benefits, Social Security benefits or any other employee benefits, all of which shall be the sole responsibility of Staffer. Group shall not withhold on behalf of Staffer or any Support Personnel any sums for income tax, unemployment insurance, Social Security or otherwise pursuant to any law or requirement of any government agency, and all such withholding, if any is required, shall be the sole responsibility of Staffer. Staffer and all Support Personnel shall indemnify and hold harmless Group from any and all loss or liability, if any, arising out of or with respect to any of the foregoing benefits or withholding requirements.
8. TERMINATION.
Events of Termination. In addition to the termination of this Agreement in accordance with Section 2 above, this Agreement may be terminated upon the occurrence of any of the following events:
- (a) Termination by Mutual Consent. This Agreement may be terminated at any time by the mutual written consent of the parties hereto.
- (b) Termination Without Cause. This Agreement may be terminated at any time by Staffer, without cause, upon ninety (90) days' prior written notice to Group.
(c) Material Breach.
Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 63–66)
What This Means (2025 FDD)
According to Degree Wellness's 2025 Franchise Disclosure Document, the franchisee, referred to as "Staffer," is required to indemnify and hold harmless "Group" (Wellness Provider Therapies, P.A.) from any losses or liabilities related to benefits or withholding requirements for both Staffer and their Support Personnel. This includes, but is not limited to, workers' compensation, unemployment compensation, sick leave, vacation pay, pension or retirement benefits, Social Security benefits, and any other employee benefits. The Staffer is also responsible for all income tax, unemployment insurance, and Social Security withholding, if required.
This indemnification clause means that if Group incurs any expenses or liabilities due to Staffer's failure to properly handle benefits or withholdings for Staffer or Support Personnel, Staffer must cover those costs. This protects Group from potential legal or financial repercussions related to employment matters that are the Staffer's responsibility as an independent contractor.
Furthermore, Staffer also agrees to indemnify the Indemnified Parties from any liability for premiums, contributions, taxes, or benefits payable under any workers' compensation, unemployment compensation, Staffer sponsored health care or health care statutorily required to be provided by Staffer, disability benefit, old age benefit, safe and/or sick leave, or tax withholding laws for which the Indemnified Party shall be finally adjudged liable as an employer with respect to any employees of Staffer (including, but not limited to the Placed Employees) assigned by Staffer to Group in accordance with this Agreement. However, the indemnification obligations in this paragraph will not be triggered by any claims, losses, damages, liabilities, or causes of action that arise from the gross negligence or willful misconduct of client.
This arrangement is typical in franchise agreements where the franchisee is considered an independent contractor. It is crucial for prospective Degree Wellness franchisees to understand their obligations regarding employment and tax matters and to ensure they have adequate insurance and legal counsel to manage these responsibilities effectively. The franchisee should consult with legal and financial professionals to fully understand the implications of these indemnification requirements.