Does Degree Wellness's license to use the premises constitute a lease or sublease?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
- 4.1 Management Company hereby grants Licensed Provider a revocable, nonassignable license to use the Premises, and all fixtures, equipment, and furnishings located therein, during the Agreement Term. The license to use the Premises granted by this Section 4.1 is not a lease or sublease of the Premises and this Agreement shall not be interpreted to create a landlord and tenant relationship between Management Company (or the owner of the Premises) and Licensed Provider or to give Licensed Provider any right to continued use, possession or occupancy of the Premises, except to the extent expressly stated in this Agreement. This license shall be deemed to end automatically upon the termination of this Agreement. Licensed Provider shall use all fixtures, equipment and furnishings granted by this Section 4.1 in the manner in which they are intended and in compliance with all rules and requirements of Management Company and, if applicable, its landlord; provided, however, that in all cases Licensed Provider shall have the discretion and authority to use such fixtures, equipment and furnishings to provide Studio Services only as deemed necessary or advisable by Licensed Provider in his/her discretion. Licensed Provider shall return to Management Company the Premises, fixtures, equipment, and furnishings in the same condition, reasonable wear and tear excepted, as they were in as of the date of this Agreement.
Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 63–66)
What This Means (2025 FDD)
According to the 2025 Degree Wellness FDD, the license granted to the Licensed Provider for using the premises is explicitly not a lease or sublease. The Management Company grants the Licensed Provider a revocable, nonassignable license to use the premises, including all fixtures, equipment, and furnishings, during the term of the agreement.
Degree Wellness emphasizes that the agreement should not be interpreted as creating a landlord-tenant relationship between the Management Company (or the property owner) and the Licensed Provider. The Licensed Provider does not have any right to continued use, possession, or occupancy of the premises beyond what is expressly stated in the agreement. The license automatically ends upon termination of the agreement.
This arrangement means that a Degree Wellness Licensed Provider has limited rights regarding the physical location of their studio. They are essentially licensees, not tenants, and their right to use the premises is contingent upon the agreement's terms. This could impact the Licensed Provider's control over the location and their ability to negotiate lease terms or make significant alterations to the property. Prospective Licensed Providers should carefully consider these limitations and understand the implications of not having a traditional lease agreement.