Does the Degree Wellness Owner's Guaranty bind the guarantor to the non-disclosure and non-competition provisions of the Franchise Agreement?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
Each of you consents and agrees that (1) your direct and immediate liability under this Guaranty shall be joint and several; (2) you will make any payment or render any performance required under the Agreement on demand if Franchise Owner fails or refuses to do so when required; (3) your liability will not be contingent or conditioned on our pursuit of any remedies against Franchise Owner or any other person; (4) your liability will not be diminished, relieved or otherwise affected by any extension of time, credit or other indulgence which we may from time to time grant to Franchise Owner or to any other person, including without limitation, the acceptance of any partial payment or performance, or the compromise or release of any claims; (5) by signing this Agreement you are confirming that you are bound to the nondisclosure and non-competition provisions applicable to the Franchise Owner in Article 9 of the Agreement; and (6) this Guaranty will continue and be irrevocable during the Term of the Agreement and afterward for so long as the Franchise Owner has any obligations under the Agreement.
Source: Item 23 — Receipts (FDD pages 66–257)
What This Means (2025 FDD)
According to Degree Wellness's 2025 Franchise Disclosure Document, the Guaranty signed by the owner binds them to the non-disclosure and non-competition provisions outlined in Article 9 of the Franchise Agreement. By signing the Guaranty, the guarantor confirms they are bound by these provisions applicable to the Franchise Owner.
This means that anyone signing the Owner's Guaranty for a Degree Wellness franchise is personally committing to uphold the confidentiality and non-competition terms of the agreement. This commitment extends throughout the term of the agreement and even after its termination, as long as the Franchise Owner has obligations under the agreement.
Specifically, the guarantor is agreeing not to disclose confidential information about Degree Wellness's business practices, and also agreeing not to engage in any competitive business activities that could harm the franchise. This is a significant obligation, as it restricts the guarantor's business activities even if they are not directly involved in the day-to-day operations of the Degree Wellness franchise.
Prospective franchisees and their guarantors should carefully review Article 9 of the Franchise Agreement to fully understand the scope of these non-disclosure and non-competition provisions before signing the Guaranty. It is also important to note that the guarantor's liability under the Guaranty is joint and several, meaning that Degree Wellness can seek to enforce the entire obligation against any one of the guarantors.