factual

Does the lien granted to Degree Wellness under the Degree Wellness Agreement extend to accounts receivable?

Degree_Wellness Franchise · 2025 FDD

Answer from 2025 FDD Document

To secure your performance under this Agreement and indebtedness for all sums due us or our affiliates, we shall have a lien upon, and you hereby grant us a security interest in, the following collateral and any and all additions, accessions, and substitutions to or for it and the proceeds from all of the same: (a) all inventory now owned or after-acquired by the Franchise, including but not limited to all inventory and supplies transferred to or acquired by you in connection with this Agreement; (b) all accounts of the Franchise now existing or subsequently arising, together with all interest in the Franchise, now existing or subsequently arising, together with all chattel paper, documents, and instruments relating to such accounts; (c) all contract rights of the Franchise, now existing or subsequently arising including, without limitation, accounts receivable and other contractual rights to payment from others; (d) all general intangibles of the Franchise, now owned or existing, or after-acquired or subsequently arising including, without limitation, all awards, damages, payments, escrowed monies, insurance proceeds, and interest, fees, charges or payments accruing on or received from or to be received on any of the foregoing in any way; and (e) all products, proceeds, substitutions, and replacements of any of the above described collateral.

You agree to execute such financing statements, instruments, and other documents, in a form satisfactory to us, that we deem necessary so that we may establish and maintain a valid security interest in and to these assets, and you authorize us to file, without your signature, such financing statements as we shall deem necessary or advisable to reflect the security interest granted herein.

Source: Item 23 — Receipts (FDD pages 66–257)

What This Means (2025 FDD)

According to Degree Wellness's 2025 Franchise Disclosure Document, the lien granted to Degree Wellness does extend to accounts receivable. Degree Wellness is granted a security interest in collateral to secure the franchisee's performance under the agreement and any debts owed to Degree Wellness or its affiliates.

This collateral includes, among other things, all of the franchise's accounts, both existing and future, along with any related documents. It also encompasses all contract rights, including accounts receivable and other contractual rights to payment from others. This means that Degree Wellness has a legal claim on these assets if the franchisee fails to meet their obligations under the agreement.

As a Degree Wellness franchisee, you must execute financing statements and other documents to ensure Degree Wellness can establish and maintain its security interest in these assets. Degree Wellness is authorized to file these statements without your signature. This gives Degree Wellness a strong position to recover any outstanding debts by claiming the listed assets, including accounts receivable, in case of default.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.