What is the Licensed Provider's obligation regarding ideas or improvements developed relating to the Degree Wellness Studio Management Business?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
In addition, in the course of the performance of the Licensed Provider Services, Licensed Provider (or its employees) may develop ideas, concepts, methods, or techniques of improvement relating to the Studio Management Business that Licensed Provider agrees to disclose to Management Company, who then may disclose to Degree Wellness to use or authorize others to use in other Degree Wellness franchises owned or franchised by Degree Wellness or its affiliates. (All of such information disclosed to or developed by Licensed Provider will be referred to in this Agreement as the "Confidential Information".)
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, if a Licensed Provider (or their employees) develops any ideas, concepts, methods, or techniques of improvement related to the Studio Management Business, they must disclose these to the Management Company. The Management Company can then disclose this information to Degree Wellness. Degree Wellness may then use or authorize others to use these improvements in other Degree Wellness franchises owned or franchised by Degree Wellness or its affiliates. All such information disclosed to or developed by the Licensed Provider is considered "Confidential Information".
This means that any innovation or improvement a franchisee comes up with related to the Degree Wellness system essentially becomes the property of Degree Wellness. The franchisee is obligated to share these ideas, and Degree Wellness has the right to implement them across the franchise system without additional compensation to the originating franchisee. This is a fairly standard practice in franchising, as franchisors aim to maintain consistency and benefit from the collective knowledge of their franchisees.
This obligation is tied to the broader concept of "Confidential Information," which the Licensed Provider agrees not to misuse. The agreement specifies that the Licensed Provider's relationship with the Management Company does not grant any ownership interest in this Confidential Information, and its use is restricted to performing services during the agreement term. Unauthorized use or duplication of this information is considered unfair competition and can result in damages to Management Company and/or Degree Wellness.
Prospective franchisees should be aware that this clause means they may not be able to patent or otherwise protect any improvements they develop for the Degree Wellness system. While this benefits the overall brand by allowing for system-wide improvements, it also means the individual franchisee may not directly profit from their innovations beyond their own studio's operations.