What is the name of the agreement used for transferring a Degree Wellness franchise?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
h all elements of the System, that we may require for Degree Wellness Studios. You must operate the Franchise at a mutually agreeable site (the "Premises") to be identified after the signing of this Agreement, and to use the System and the Marks in the operation of that Franchise, for an "Initial Term" of 10 years. The Initial Term will begin on the Agreement Date, unless you are assuming the Franchise pursuant to a Transfer, in which case the length of the Initial Term shall be determined by the applicable Transfer Agreement. To avoid uncertainty, the expiration date of the Initial Term is listed on Exhibit 1.
Source: Item 23 — Receipts (FDD pages 66–257)
What This Means (2025 FDD)
According to Degree Wellness's 2025 Franchise Disclosure Document, if a franchisee transfers their franchise, the length of the initial term shall be determined by the applicable Transfer Agreement. The FDD also states that upon receiving consent for the transfer or sale of the franchise, the proposed new owner shall agree to assume all of the obligations under the current Franchise Agreement in a form acceptable to Degree Wellness, and/or, at their option, shall agree to execute a new Franchise Agreement with them in the form then being used by them.
This means that when a Degree Wellness franchise is transferred to a new owner, the specific terms of the transfer, including the length of the initial franchise term, are governed by a document called the Transfer Agreement. This agreement outlines the conditions and obligations that both the seller (the existing franchisee) and the buyer (the new franchisee) must adhere to during the transfer process.
Furthermore, Degree Wellness has the option to require the new owner to either assume the existing Franchise Agreement or sign a new Franchise Agreement altogether. This provides Degree Wellness with flexibility in ensuring that the new owner is bound by the most current terms and conditions of the franchise. Degree Wellness may also require the original franchisee to guarantee the performance and obligations of the proposed new owner.
Prospective franchisees should carefully review the terms of the Transfer Agreement and understand their obligations, as well as the potential implications of assuming an existing agreement versus signing a new one. It is also important to note that Degree Wellness's consent to the transfer does not waive any claims they may have against the original franchisee or any principal owner, nor does it waive their right to demand compliance with the agreement from the new owner.