What happens to the Degree Wellness franchisee's rights if Degree Wellness assumes the lease?

According to Degree Wellness's 2025 Franchise Disclosure Document, if Degree Wellness elects to assume the lease, the landlord will recognize Degree Wellness as the tenant, and the franchisee will no longer have any rights under the lease. This clause is triggered if the franchisee defaults on the lease terms, and the landlord offers Degree Wellness the opportunity to cure the default and assume the lease.

This provision protects Degree Wellness by allowing them to maintain control over the location of the franchise if the franchisee fails to meet their lease obligations. It ensures business continuity and protects the brand's presence in that market. For a franchisee, this means that a lease default could result in losing the business location entirely if Degree Wellness steps in to take over the lease.

However, Degree Wellness is not obligated to assume the lease. The document states that Degree Wellness has the opportunity to cure the default and assume the lease, but it is not required to do so. If Degree Wellness does take over the lease, they assume all remaining obligations from the date of assignment, including occupancy rights and the right to sublease the premises for the remainder of the lease term. Degree Wellness does not have to pay any security deposit to the landlord.

This arrangement benefits Degree Wellness by giving them control over the location and minimizing potential losses from a failed franchise. It is a standard practice in franchising to include such clauses to protect the franchisor's interests and maintain brand consistency. Franchisees should be aware of this clause and ensure they can meet their lease obligations to avoid losing their rights to the business location.