Are Degree Wellness general managers subject to restrictive covenants?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
b. Your Principal Owners and General Manager must immediately comply with the restrictive covenants set forth in this Agreement and any Restrictive Covenants Agreement signed by your General Manager, as applicable.
d.
General Managers to Sign Agreement.
You further agree that you will cause each General Manager to enter into and deliver to us a Restrictive Covenant Agreement in such form as we may approve, either concurrently with the execution of this Agreement or at such later date when the affiliation of such person with you is established.
You acknowledge and agree that we are under no duty or obligation to you to enforce any such Agreements for your or our benefit.
The duties and obligations imposed in the
Restrictive Covenant Agreement shall survive the Transfer, expiration or earlier termination of this Agreement.
17.8 Specific Performance; Injunctive Relief; Liquidated Damages.
- a. Equitable Remedies. Provided we give you the appropriate notice, we will be entitled, without being required to post a bond, to the entry of temporary and permanent injunctions and orders of specific performance to (1) enforce the provisions of this Agreement relating to your use of the Marks and non-disclosure, non-solicitation, non-disparagement, and non-competition obligations under this Agreement and any Restrictive Covenants Agreement signed by a General Manager
Source: Item 23 — Receipts (FDD pages 66–257)
What This Means (2025 FDD)
According to Degree Wellness's 2025 Franchise Disclosure Document, general managers are subject to restrictive covenants. Franchisees must ensure that their general managers comply with the restrictive covenants outlined in the Franchise Agreement and any separate Restrictive Covenants Agreement. Degree Wellness requires franchisees to have each general manager sign and deliver a Restrictive Covenant Agreement, in a form approved by Degree Wellness, either when the Franchise Agreement is executed or when the person becomes affiliated with the franchisee.
The Restrictive Covenant Agreement's duties and obligations remain in effect even if the franchise is transferred, expires, or is terminated early. However, Degree Wellness is not obligated to enforce these agreements for the franchisee's or its own benefit. Degree Wellness can seek injunctions and specific performance orders to enforce non-disclosure, non-solicitation, non-disparagement, and non-competition obligations under the Franchise Agreement or any Restrictive Covenants Agreement signed by a general manager.
If a franchisee or their general manager violates Section 9 of the Franchise Agreement, Degree Wellness would suffer damages of at least $50,000. In addition to these liquidated damages, the franchisee must also pay any actual damages exceeding that amount, plus all attorney's fees incurred by Degree Wellness as a result of the breach. These measures highlight the importance Degree Wellness places on protecting its confidential information and maintaining a competitive advantage.