Does the non-competition agreement for Degree Wellness extend to the Licensed Provider's indirect interest in a competing business?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
- (a) Non-Competition. During the Agreement Term, Licensed Provider will not, directly or indirectly, perform services for, or have any direct or indirect interest as an owner, investor, partner, director, officer, employee, manager, consultant, representative, or agent in, any business that offers products or services the same as or similar to those offered or sold at the Studio. Licensed Provider's duties and obligations under this Section 10.3(a) shall survive for two (2) years following any termination or expiration of this Agreement; provided, however, that following such termination or expiration of this Agreement, this covenant shall only apply with respect to a competitive business that has a place of business located within a five (5) mile radius of the location of the Premises.
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, the non-competition agreement extends to the Licensed Provider's direct and indirect interests in a competing business. During the agreement term, the Licensed Provider cannot perform services for or have any direct or indirect interest in any business offering similar products or services to those offered at the Degree Wellness studio. This includes being an owner, investor, partner, director, officer, employee, manager, consultant, representative, or agent.
Following the termination or expiration of the agreement, the non-competition obligations continue for two years. However, after termination or expiration, the covenant applies only to competitive businesses with a place of business within a five-mile radius of the original Degree Wellness location.
This restriction ensures that the Licensed Provider cannot use knowledge and experience gained while operating a Degree Wellness franchise to immediately benefit a competing business, either directly or indirectly. This is a fairly standard practice in franchising to protect the brand and prevent unfair competition from former franchisees.