What happens if a Degree Wellness franchisee fails to maintain required insurance coverage?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
- g. If you at any time fail or refuse to maintain any insurance coverage required by us or to furnish satisfactory evidence thereof, then we, at our option and in addition to our other rights and remedies under this Agreement, may, but need not, obtain such insurance coverage on your behalf, and you shall reimburse us on demand for any costs or premiums paid or incurred by us.
Source: Item 23 — Receipts (FDD pages 66–257)
What This Means (2025 FDD)
According to Degree Wellness's 2025 Franchise Disclosure Document, if a franchisee fails to maintain the required insurance coverage or provide satisfactory evidence of coverage, Degree Wellness has the option, but not the obligation, to obtain the necessary insurance on the franchisee's behalf. The franchisee is then required to reimburse Degree Wellness for any costs or premiums incurred.
This provision protects Degree Wellness from potential liabilities arising from the franchisee's operations. By allowing Degree Wellness to secure insurance coverage when a franchisee fails to do so, the brand mitigates risks associated with uninsured incidents at the franchise location. This ensures that the Degree Wellness brand and its other franchisees are not exposed to unnecessary legal or financial risks.
For a prospective franchisee, this means that maintaining the required insurance is crucial. Failure to do so not only puts their own business at risk but also gives Degree Wellness the right to take control of the insurance procurement and pass the costs on to the franchisee. This could potentially lead to higher premiums or less favorable terms than the franchisee might have obtained independently. It is important to note that Degree Wellness's decision to obtain insurance on behalf of the franchisee does not waive the franchisee's responsibility for any losses or damages.