If a Degree Wellness non-competition covenant is deemed unenforceable, how will it be addressed?

According to Degree Wellness's 2025 Franchise Disclosure Document, if any of the non-competition, non-solicitation, or other restrictive covenants are deemed unenforceable due to their scope (area, business activity prohibited, length of time, or other terms), the invalid provision will be modified or limited. This modification will occur to the extent necessary to make the provision valid and enforceable, aligning with the intent of both parties as expressed in the provision and under the laws applied in the forum where enforcement is sought. This ensures that the non-compete is upheld to the greatest extent possible.

This clause is important for prospective Degree Wellness franchisees because it means that the franchisor is committed to enforcing the non-compete agreement to the fullest extent of the law. However, it also provides a safeguard in case the non-compete is deemed too broad or restrictive by a court. The modification clause allows the court to narrow the scope of the non-compete rather than striking it down entirely, which could still protect Degree Wellness's interests while allowing the franchisee some freedom to operate.

This approach is fairly standard in franchising, as franchisors typically want to protect their brand and customer relationships. Non-compete agreements are common, but their enforceability can vary depending on state laws. The modification clause is a way for Degree Wellness to address this uncertainty and increase the likelihood that the non-compete will be enforced, even if it needs to be adjusted. Franchisees should be aware of the specific terms of the non-compete and understand how this modification clause could affect them if they ever decide to leave the Degree Wellness system.