If a Degree Wellness franchisee's lease is terminated, is that grounds for termination of the franchise agreement?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
all letters and notices sent to Franchisee pertaining to the Lease and the Premises at the same time that such letters and notices are sent to Franchisee.
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- Franchisor will have the right to enter onto the Business premises at any time, to make any modification or alteration necessary to protect Degree Wellness System and Proprietary Marks or to cure any default under the Franchise Agreement or under the Lease, without being guilty of trespass or any other crime or tort, and the Landlord will not be responsible for any expense or damages arising from Franchisor's action in connection therewith.
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- In the event of Franchisee's default under the terms of the Lease, Landlord shall promptly deliver notice of such default to Franchisor and shall offer Franchisor the opportunity to cure the default and to assume the Lease in Franchisor's name. If Franchisor elects to cure the default and assume the Lease, Franchisor, within 10 days of its receipt of notice from Landlord, shall notify Landlord of its intent to cure such default and to assume the Lease. If Franchisor elects to cure the default, it shall cure the default within 30 days of such election or, if the default cannot be reasonably cured within such 30-day period, then Franchisor will commence and proceed to cure the default within such time as is reasonably necessary to cure the default.
Source: Item 23 — Receipts (FDD pages 66–257)
What This Means (2025 FDD)
Based on the 2025 FDD, the termination of a Degree Wellness franchisee's lease can have significant implications, though the document doesn't explicitly state it as direct grounds for termination of the franchise agreement. However, the FDD outlines several provisions that link the lease and franchise agreement, giving Degree Wellness certain rights and options if the franchisee defaults on the lease.
Specifically, the landlord is required to notify Degree Wellness of any franchisee default under the lease and offer Degree Wellness the opportunity to cure the default and assume the lease. If Degree Wellness elects to cure the default, it has a specified timeframe to do so. If Degree Wellness assumes the lease, the franchisee no longer has any rights under it. This indicates that maintaining the lease is crucial for the franchisee's operation, and a failure to do so could lead to Degree Wellness taking control of the premises.
Furthermore, the FDD states that Degree Wellness has the right to enter the premises to protect its system and proprietary marks or to cure any default under the franchise agreement or the lease. This provision underscores Degree Wellness's interest in ensuring the continued operation of the studio and its adherence to brand standards. While the FDD does not explicitly state that lease termination automatically terminates the franchise agreement, the franchisor's ability to assume the lease and control the premises suggests that a terminated lease could severely impact the franchisee's ability to operate and potentially lead to further action by Degree Wellness under the franchise agreement.