Can Degree Wellness operate other healthcare-related companies or franchises under different trademarks within the Protected Territory?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
Except as otherwise provided in this Paragraph 2.3, we retain all rights with respect to Studio franchises, the Marks and the System, including (by way of example only and not as a limitation): (a) the right to operate or grant others the right to operate Studio franchises physically located outside the Protected Territory on terms and conditions we deem appropriate; (b) the right to operate or offer other healthcare-related companies or franchises or enter into other lines of business offering similar or dissimilar products or services under trademarks or service marks other than the Marks, both within or outside of the Protected Territory and to use other channels of distribution (for example, the internet, email, social media, telemarketing, or other direct marketing) in connection with such system(s) and/or location(s); (c) the right to sell or distribute, at retail or wholesale, directly or indirectly, or via the internet or any other means, or license others to sell or distribute, via any means (including the internet and other channels of distribution) any products that bear any proprietary marks, including the Marks, whether within or outside your Protected
Territory; (d) the right to own, acquire, establish, and/or operate, and license others to establish and operate, businesses different from a Franchised Business but operated under the Marks within or outside your Protected Territory, and to use other channels of distribution (for example, the internet, email, social media, telemarketing, or other direct marketing) in connection with such system(s) and/or location(s); and (e) the right to be acquired (whether though acquisition of assets, or equity interests or otherwise, regardless of the form of transaction) by a business or entity providing products and services similar to those provided by Franchised Businesses even if that business or entity operates, franchises, or licenses competitive businesses in your Protected Territory.
Source: Item 23 — Receipts (FDD pages 66–257)
What This Means (2025 FDD)
According to Degree Wellness's 2025 Franchise Disclosure Document, Degree Wellness retains the right to operate or offer other healthcare-related companies or franchises under different trademarks or service marks, both within or outside of the franchisee's protected territory. They can also enter into other lines of business offering similar or dissimilar products or services under different trademarks. Degree Wellness can also use other channels of distribution, such as the internet, email, social media, or telemarketing, in connection with these other systems or locations.
This means that while a Degree Wellness franchisee is granted a protected territory, this protection is limited to other Degree Wellness studios. Degree Wellness is not restricted from operating other businesses, even those that might be considered similar or competitive, under different brand names within the same territory. This is a common practice in franchising, where franchisors often seek to diversify their offerings and revenue streams.
For a prospective franchisee, this clause highlights a potential risk. While the franchisee will have a protected territory for the Degree Wellness brand, Degree Wellness could introduce other brands or services that compete within the same market. It is important for potential franchisees to understand this provision and consider how it might impact their business. They should evaluate the market carefully and assess the potential for competition from Degree Wellness or its affiliates under different brands.
It is also important to note that Degree Wellness has the right to sell or distribute products bearing their proprietary marks through various channels, including the internet, within or outside the protected territory. This could further impact a franchisee's sales, as customers may choose to purchase products online rather than from the physical studio location. Therefore, a franchisee's success depends not only on local market conditions but also on Degree Wellness's broader business strategies and distribution methods.