What happens if a Degree Wellness franchisee becomes bankrupt or insolvent?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
- d. you are adjudged a bankrupt, become insolvent or make a general assignment for the benefit of creditors, or you fail to satisfy any judgment rendered against you for a period of 30 days after all appeals have been exhausted;
Source: Item 23 — Receipts (FDD pages 66–257)
What This Means (2025 FDD)
According to the 2025 Degree Wellness Franchise Disclosure Document, if a franchisee is adjudged bankrupt, becomes insolvent, or makes a general assignment for the benefit of creditors, Degree Wellness has the right to terminate the Franchise Agreement. This termination is effective upon delivery of a termination notice to the franchisee, and is subject to any applicable right to cure as mandated by law.
This clause protects Degree Wellness by allowing them to sever ties with a franchisee who is facing severe financial difficulties. Bankruptcy or insolvency can indicate an inability to manage the business effectively, which could negatively impact the Degree Wellness brand and reputation. By terminating the agreement, Degree Wellness can find a more stable franchisee to operate the location.
It is important for a prospective Degree Wellness franchisee to understand the financial risks involved in operating a franchise and to have a solid financial plan in place. Franchisees should also be aware of their rights to cure any default, as provided by applicable law. This means that in some cases, a franchisee may have the opportunity to correct the financial issues that led to the default before Degree Wellness can terminate the agreement. Franchisees should seek legal counsel to fully understand their rights and obligations under the Franchise Agreement and any applicable laws.