For Degree Wellness franchisees, under what condition are initial fees and payments deferred?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
neral release from liability for any and all claims that that Franchise Owner and its Principal Owners may have against Franchisor,
its officers, directors, agents, or employees, and Franchisor's affiliates or their officers, directors, agents, or employees, except those claims arising under the Minnesota Franchise Law.
No statement, questionnaire, or acknowledgement signed or agreed to by a franchisee in connection with the commencement of the franchise relationship shall have the effect of (i) waiving any claims under any applicable state franchise law, including, fraud in the inducement, or (ii) disclaiming reliance on any statement made by any franchisor, franchise seller, or other person acting on behalf of the franchisor. This provision supersedes any other term of any document executed with the franchise.
E. Section 6 of the Franchise Agreement is supplemented by the following: Based upon the franchisor's financial condition, the Minnesota Securities Commissioner has required a financial assurance condition. Therefore, all initial fees and payments owed by franchisees shall be deferred until the franchisor completes its pre-opening obligations under the franchise agreement.
IN WITNESS WHEREOF, the Parties hereto affix their signatures and execute this Addendum as of the day and year first above written.
a Degree Wellness Franchise, LLC, Delaware limited liability company, FRANCHISE OWNER:
SOUTH DAKOTA AMENDMENT TO FRANCHISE AGREEMENT
THIS AMENDMENT TO FRANCHISE AGREEMENT ("Amendment") dated , is intended to be a part of, and by this reference is incorporated into that certain Development Agreement (the "Franchise Agreement") dated, by and between Degree Wellness Franchise, LLC ("Franchisor"), a Delaware limited liability company, with its principal office in Jacksonville, Florida, and ("you" or "Developer"). Defined terms contained in the Development Agreement shall have the identical meanings in this Amendment.
Source: Item 23 — Receipts (FDD pages 66–257)
What This Means (2025 FDD)
According to Degree Wellness's 2025 Franchise Disclosure Document, initial fees and payments are deferred for franchisees under specific conditions in South Dakota and Minnesota. In South Dakota, this deferral is contingent upon the franchisor's financial condition, as mandated by the South Dakota Securities Regulation Office, and lasts until the franchisor fulfills its pre-opening obligations. Similarly, development fees and initial payments for area developers are deferred until the first franchise under the development agreement opens.
In Minnesota, the deferral of initial fees and payments is also tied to the franchisor's financial condition, as required by the Minnesota Securities Commissioner. This deferral remains in effect until Degree Wellness completes its pre-opening obligations under the franchise agreement.
These conditions provide a level of financial assurance to new franchisees in South Dakota and Minnesota, ensuring that they are not required to pay initial fees until Degree Wellness has met its obligations to prepare them for opening their franchise. This can significantly reduce the upfront financial burden on franchisees and mitigate some of the initial risk associated with starting a new business. Prospective franchisees outside of South Dakota and Minnesota should inquire whether similar financial assurances or deferral options are available in their respective states, especially if they have concerns about the franchisor's financial stability or pre-opening support.