What are the minimum development obligations for the Developer under the Degree Wellness Development Agreement?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
ach execute the form of personal guaranty attached to the foregoing Franchise Agreement, as well as any additional Franchise Agreements described in Section 4 of this Agreement.
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- Additional Franchise Agreements. Developer agrees and acknowledges that it must: (i) enter into Franchisor's then-current form of Franchise Agreement for each Additional Studio that Developer is required to open under this Agreement; and (ii) enter into such Franchise Agreements at such times that are required for Developer to timely meet, and strictly adhere to, its obligations under the agreed upon Development Schedule.
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- Development Obligations. Developer must ensure that, at a minimum, Developer: (i) opens and commences operations of the number of new Studios during each of the development periods defined in the Development Schedule (each, a "Development Period"); and (ii) has the minimum cumulative number of Studios open and operating at the expiration of each such Development Period. The parties agree and acknowledge that time is of the essence with respect to the foregoing development obligations, and that Developer's failure to comply with the Development Schedule in any manner with respect to any Development Period is grounds for immediate termination of this Agreement if not timely cured as set forth in Section 6.2 of this Agreement (and any future development rights granted hereunder).
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Source: Item 23 — Receipts (FDD pages 66–257)
What This Means (2025 FDD)
According to Degree Wellness's 2025 Franchise Disclosure Document, a Developer must meet specific development obligations, including opening and operating a minimum number of new studios within defined development periods. The Developer must adhere to the agreed-upon Development Schedule, ensuring that the minimum cumulative number of studios is open and operating by the expiration of each Development Period.
Specifically, Attachment A to the Development Agreement outlines the Development Schedule. Within 12 months from the effective date of the agreement, the Developer must have opened one new Degree Wellness studio. By months 13 through 24, the Developer is required to open another new studio, bringing the cumulative number of operating studios to two. Finally, by months 25 through 36, the Developer must open one more studio, resulting in a cumulative total of three operating studios.
Time is of the essence regarding these development obligations. Failure to comply with the Development Schedule in any manner can result in immediate termination of the Development Agreement if the breach is not cured as per the agreement's terms. This strict adherence to the schedule underscores the importance Degree Wellness places on timely expansion and market penetration by its Developers.
Prospective Developers should carefully review the Development Schedule and assess their ability to meet these obligations before entering into a Development Agreement with Degree Wellness. The consequences of failing to meet these obligations can be severe, including the loss of development rights.