What must the principals/owners of the Developer do if the Developer is a business entity when entering into a Degree Wellness Franchise Agreement?

According to Degree Wellness's 2025 Franchise Disclosure Document, if the Developer is a business entity, then each of the Developer's principals/owners must execute the form of personal guaranty attached to the Franchise Agreement. This requirement extends not only to the initial Franchise Agreement for the first studio but also to any additional Franchise Agreements as described in Section 4 of the Development Agreement.

This personal guarantee is a common practice in franchising, especially when the franchisee is a business entity rather than an individual. It ensures that Degree Wellness has recourse to the personal assets of the principals/owners should the business entity default on its obligations under the Franchise Agreement. This reduces the risk for Degree Wellness and provides an additional layer of security.

For a prospective Degree Wellness franchisee, this means that if you are setting up a corporation, LLC, or other business entity to operate the franchise, you and your fellow owners will need to be prepared to personally guarantee the obligations of the business. This is a significant commitment, as it puts your personal assets at risk. It is important to fully understand the terms of the personal guaranty and to assess your own risk tolerance before signing the Franchise Agreement.