If Degree Wellness sublets the premises, must the subtenant/franchisee assume 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, if Degree Wellness elects to sublet the premises, the subtenant/franchisee must expressly assume all of Degree Wellness's obligations under the lease. However, Degree Wellness remains liable for the performance of the terms of the lease. Degree Wellness must also notify the landlord of the name of the subtenant/franchisee within 10 days after the subletting.
This means that while the subtenant takes on the responsibilities outlined in the original lease, Degree Wellness remains ultimately accountable to the landlord for ensuring all lease obligations are met. This arrangement provides a layer of security for the landlord, as they have recourse to Degree Wellness should the subtenant fail to meet their obligations.
For a prospective franchisee, this clause highlights the importance of carefully reviewing the lease agreement and understanding all obligations before entering into a sublease agreement with Degree Wellness. It also underscores the need to assess Degree Wellness's financial stability, as they remain liable for the lease even after subletting the premises. Franchisees should seek legal counsel to fully understand the implications of this clause and negotiate terms that protect their interests.