Can Degree Wellness impose conditions on a transfer of interest to a family member or key employee?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
- 14.6 Death and Disability. Upon the death or permanent disability of you or a Principal Owner, the executor, administrator, conservator or other personal representative of the deceased or disabled person must Transfer the deceased or disabled person's Interest within a reasonable time, not to exceed twelve (12) months from the date of death or permanent disability, to a person we have approved. Such Transfers, including without limitation transfers by a will or inheritance, will be subject to all the terms and conditions for assignments and Transfers contained in this Agreement. Failure to so dispose of an Interest within the 12-month period of time will constitute grounds for termination of this Agreement.
14.4 No Transfer Without Approval.
- a. You understand and acknowledge that the rights and duties created by this Agreement are personal to you and that we have entered into this Agreement in reliance on the individual or collective character, skill, aptitude, attitude, business ability, and financial capacity of you and your Principal Owners. Accordingly, if you Transfer or attempt to Transfer either this Agreement or any part of your interest in it, or any Interest of Franchise Owner or a Principal Owner, without our advance written approval, you will have breached this Agreement and we will have the right to terminate this Agreement under the terms of Article 15 below. In addition, any attempted Transfer by you of this Agreement or any part of your Interest in it, without our prior consent, is null and void.
- b. As used in this Agreement the term "Transfer" means any voluntary, involuntary, direct or indirect assignment, sale, gift, exchange, grant of a security interest, or occurrence of any other event which would or might change the ownership of any Interest, and includes, without limitation: (1) the Transfer of ownership of stock, units, membership interests, partnership interest or othe
You agree that during the Term of this Agreement, neither you, nor any Principal Owner, nor any member of your immediate family or of the immediate family of any Principal Owner, shall directly or indirectly perform services for, or have any direct or indirect interest as an owner, investor, partner, director, officer, employee, manager, consultant, representative, or agent in, any business that offers products or services the same as or similar to those offered or sold at Degree Wellness Studio franchises; provided, however, that the ownership of one percent (1%) or less of a publicly traded company will not be deemed to be prohibited by this Paragraph.
You agree that during the Term of this Agreement, and thereafter for a period of two (2) years following any Transfer, termination or expiration of this Agreement, neither you, nor any Principal Owner, nor any member of your immediate family or of the immediate family of any Principal Owner, will directly or indirectly (a) solicit for wellness or related services or products with any person who was a member or client of the Franchise within the two year period prior to such Transfer, termination or expiration; or (b) interfere with our relationship with any of our franchisees, vendors, suppliers or referral sources.
Source: Item 23 — Receipts (FDD pages 66–257)
What This Means (2025 FDD)
According to Degree Wellness's 2025 Franchise Disclosure Document, transfers of interest, including those to family members, are subject to specific conditions. Specifically, upon the death or permanent disability of the franchisee or a Principal Owner, the representative of the deceased or disabled person must transfer the interest within twelve months to a Degree Wellness-approved person. These transfers, including those by will or inheritance, are subject to all the standard transfer conditions outlined in the agreement. Failure to transfer the interest within this 12-month period can result in the termination of the Franchise Agreement.
Degree Wellness maintains that the rights and duties within the agreement are personal to the franchisee and Principal Owners. As such, any transfer or attempted transfer of the agreement or any interest in it, without Degree Wellness's prior written approval, constitutes a breach of the agreement and can lead to termination. Any attempted transfer without this prior consent is considered null and void. The term "Transfer" encompasses any change in ownership of any interest, whether voluntary, involuntary, direct, or indirect, including the transfer of stock, units, membership interests, or partnership interests.
Degree Wellness also stipulates that if a franchisee transfers their franchise, neither the franchisee, any Principal Owner, nor any member of their immediate family can engage in any competitive business that offers similar products or services as Degree Wellness. This restriction applies during the term of the agreement. Furthermore, for two years following any transfer, termination, or expiration of the agreement, these individuals are prohibited from soliciting wellness services or products from anyone who was a member or client of the franchise within the two years before the transfer, termination, or expiration. They are also barred from interfering with Degree Wellness's relationships with its franchisees, vendors, suppliers, or referral sources.