What is the Degree Wellness franchisee's obligation in the event of any minority owner transfer?

According to the 2025 Degree Wellness Franchise Disclosure Document, in the event of a minority owner transfer, the franchisee must promptly notify Degree Wellness of the change in ownership or interests. Additionally, the franchisee's formal partnership, corporation, or other formation documents, along with all stock certificates, partnership units, or other evidence of ownership, must include a statement or legend that reflects the transfer restrictions outlined in Paragraph 14.4 of the franchise agreement.

This requirement ensures that Degree Wellness is kept informed about any changes in the ownership structure of the franchise, even if the changes involve minority owners. The notification allows Degree Wellness to maintain accurate records of ownership and to monitor compliance with the transfer restrictions specified in the franchise agreement. The inclusion of transfer restrictions in the franchisee's formation documents and ownership certificates serves as a constant reminder of these restrictions to all owners and potential transferees.

It's important to note that interests owned by individuals other than the principal owners (minority owners) can be transferred without Degree Wellness's advance consent, unless the transfer would result in the transferee and any affiliated parties holding more than a collective 25% interest in the Franchise Owner. In such cases, advance written approval from Degree Wellness is required before the transfer can proceed. This provision allows Degree Wellness to maintain control over significant changes in ownership that could potentially impact the operation or management of the franchise.