If Degree Wellness assigns the lease to a subtenant/franchisee, what happens to Degree Wellness's obligations under the lease?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
Notwithstanding anything contained in this Lease, Franchisor is expressly authorized, without the consent of the Landlord, to assign the Lease, or to sublet all or a portion of Premises, to an authorized franchisee. If Franchisor elects to assign the Lease, the subtenant/franchisee shall expressly assume all of Franchisor's obligations under the Lease, and Franchisor shall be released of all obligations to Landlord under the Lease as of the date of assignment. If Franchisor elects to sublet the premises, such subletting shall be subject to the terms of this Lease, the subtenant/franchisee shall expressly assume all of Franchisor's obligations under the Lease, and Franchisor shall remain liable for the performance of the terms of this Lease. Franchisor shall notify Landlord as to the name of the subtenant/franchisee within 10 days after such assignment or subletting, as applicable.
Source: Item 23 — Receipts (FDD pages 66–257)
What This Means (2025 FDD)
According to Degree Wellness's 2025 Franchise Disclosure Document, Degree Wellness is authorized to assign the lease or sublet the premises to an authorized franchisee without the landlord's consent. If Degree Wellness assigns the lease, the subtenant/franchisee must expressly assume all of Degree Wellness's obligations under the lease, and Degree Wellness is then released from all obligations to the landlord as of the assignment date. Degree Wellness must notify the landlord of the subtenant/franchisee's name within 10 days after the assignment or subletting.
However, if Degree Wellness elects to sublet the premises, the subletting is subject to the terms of the lease, and the subtenant/franchisee must expressly assume all of Degree Wellness's obligations under the lease. In this case, Degree Wellness remains liable for the performance of the lease terms.
This distinction between assignment and subletting is important for a prospective franchisee. If Degree Wellness assigns the lease, the franchisee essentially steps into Degree Wellness's shoes with no further obligation from Degree Wellness. If Degree Wellness sublets, Degree Wellness remains ultimately responsible for ensuring the lease obligations are met, even though the franchisee is operating the location. Franchisees should carefully review the lease terms and understand whether they are assuming the lease through an assignment or a sublease, as this will impact the liabilities and responsibilities of both the franchisee and Degree Wellness.