Does a Degree Wellness Licensed Provider have any contractual rights against Degree Wellness regarding 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 that while the Licensed Provider operates a Degree Wellness Studio, their contractual relationship is primarily with the Management Company, not directly with the Degree Wellness franchisor. The Licensed Provider cannot seek legal recourse from Degree Wellness for issues related to the studio's operation, profitability, employee matters, or marketing materials.
This arrangement is somewhat unusual in franchising, where franchisees typically have a direct contractual relationship with the franchisor. The Degree Wellness structure interposes a Management Company between the brand and the Licensed Provider. Prospective Licensed Providers should carefully evaluate this structure and understand that their rights and obligations are primarily defined by their agreement with the Management Company, with Degree Wellness maintaining a more indirect role.
This setup could limit the Licensed Provider's ability to directly influence Degree Wellness's policies or seek direct support from the franchisor. It also places greater importance on the relationship between the Licensed Provider and the Management Company, as the Management Company serves as the primary point of contact and support.