What happens to the duties and obligations imposed in the Restrictive Covenant Agreement for Degree Wellness after the termination of the Franchise Agreement?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
The duties and obligations imposed in the
Restrictive Covenant Agreement shall survive the Transfer, expiration or earlier termination of this Agreement.
16.6 Continuing Obligations. All obligations of this Agreement (whether yours or ours) that expressly or by their nature survive the expiration or termination of this Agreement will continue in full force and effect after and notwithstanding its expiration or termination until they are satisfied in full or by their nature expire. Without limiting the foregoing, you acknowledge and agree that your covenants in Article 9 above survive the termination or expiration of this Agreement to the extent set forth in such Article 9.
Source: Item 23 — Receipts (FDD pages 66–257)
What This Means (2025 FDD)
According to Degree Wellness's 2025 Franchise Disclosure Document, the duties and obligations outlined in the Restrictive Covenant Agreement remain in effect even after the Franchise Agreement is terminated or expires. This means that even after a franchisee leaves the Degree Wellness system, they are still bound by the terms of the Restrictive Covenant Agreement.
This continuing obligation is further reinforced by the clause stating that all obligations within the agreement that expressly or by their nature are meant to survive termination will remain in full effect. Specifically, the franchisee's covenants detailed in Article 9 of the agreement are explicitly stated to survive the termination or expiration of the agreement to the extent outlined in Article 9.
For a prospective Degree Wellness franchisee, this means that the restrictions on their activities after leaving the franchise system, such as non-compete clauses or confidentiality agreements, will continue to apply. It is important for potential franchisees to carefully review Article 9 and the Restrictive Covenant Agreement to fully understand the scope and duration of these post-termination obligations. Understanding these obligations is crucial for planning future business activities after the franchise term ends.