Does a Degree Wellness Licensed Provider have any contract or other rights against Degree Wellness with respect to the operation or profitability of the Studio business?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
9.3 Notwithstanding the fact that Degree Wellness is made a third party beneficiary of Sections 10 and 11.1 and certain other provisions in this Agreement, Licensed Provider and Management Company acknowledge and agree that Degree Wellness is not a party to this Agreement, and that Licensed Provider has no contract or other rights against Degree Wellness with respect to any matter including, without limitation, the operation or profitability of the Studio business, any employee-related matters, and any marketing or other System materials, methods or guidelines.
Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 63–66)
What This Means (2025 FDD)
According to Degree Wellness's 2025 Franchise Disclosure Document, a Licensed Provider has no contractual rights against Degree Wellness regarding the operation or profitability of the Studio business. Degree Wellness is explicitly not a party to the agreement between the Licensed Provider and the Management Company. This means the Licensed Provider cannot make claims against Degree Wellness for issues related to the Studio's operation, profitability, employee matters, or marketing materials.
This arrangement is structured to keep Degree Wellness separate from the direct contractual relationship between the Management Company and the Licensed Provider. The Management Company is responsible for providing management and administrative services to the Licensed Provider, who in turn offers health and wellness services utilizing Degree Wellness's system and marks. Degree Wellness's role is more of a licensor, allowing the use of its system and marks, but not directly involved in the operational agreements.
This separation of responsibility has implications for the Licensed Provider. While they benefit from using the Degree Wellness system, they must rely on the Management Company for support and have no direct recourse to Degree Wellness for contractual matters. This underscores the importance of carefully evaluating the Management Company and the terms of the agreement between the Licensed Provider and the Management Company.
Prospective Licensed Providers should be aware of this arrangement and conduct thorough due diligence on the Management Company. Understanding the scope of services provided by the Management Company, and the limitations of Degree Wellness's direct involvement, is crucial for assessing the risks and opportunities associated with this franchise model.