When is the initial franchise fee for Degree Wellness due?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
- 16.1 Payment of Amounts Owed to Degree Wellness. You agree to pay us within five (5) days after the effective date of termination or expiration of the Franchise, or any later date that the amounts due to us are determined, all amounts owed to us or our affiliates which are then unpaid including, without limitation, any unpaid Initial Franchise Fee, any unpaid Continuing Franchise Fees, and any termination fee, damages, costs or expenses owed by you pursuant to Section 15.3, together with any audit costs and expenses owed by you pursuant to Section 13.2.
Source: Item 23 — Receipts (FDD pages 66–257)
What This Means (2025 FDD)
Based on the 2025 Degree Wellness Franchise Disclosure Document, the initial franchise fee, if unpaid, becomes due within five days after the termination or expiration of the franchise agreement. Specifically, this applies to any unpaid Initial Franchise Fee along with other outstanding amounts like Continuing Franchise Fees, termination fees, damages, costs, or expenses. This clause ensures that Degree Wellness can recover any pending dues from the franchisee upon cessation of the franchise operation.
This condition is important for prospective franchisees to understand, as it clarifies the financial obligations that persist even after the franchise agreement ends. Franchisees need to be aware that any outstanding initial franchise fee, along with other fees and costs, must be settled promptly upon termination or expiration. Failing to do so could lead to further legal actions and additional expenses.
In the broader context of franchise agreements, it is common for franchisors to stipulate payment terms for various fees upon termination or expiration. This provision in the Degree Wellness FDD aligns with standard practices aimed at protecting the franchisor's financial interests and ensuring all outstanding debts are cleared in a timely manner. Franchisees should maintain diligent financial records and ensure timely payments to avoid potential complications upon termination or expiration of their franchise agreement.