How is the Protected Territory for a Degree Wellness franchise designated and updated?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
Provided you are in full compliance with this Agreement, neither we nor our affiliates will operate or grant a franchise for the operation of another Studio franchise physically located within the territory described in Exhibit 1 (the "Protected Territory").
You and we will mutually designate your Protected Territory upon or after the signing of this Agreement and Exhibit 1 shall be deemed to be automatically updated and revised to reflect such designation or any mutually agreed upon changes to 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, the Protected Territory is designated upon or after signing the Franchise Agreement. The specific details of the territory are outlined in Exhibit 1 of the agreement. The franchisee and Degree Wellness will mutually agree on the boundaries of the Protected Territory. Exhibit 1 is then automatically updated to reflect the agreed-upon territory or any mutually agreed-upon changes.
This means that a Degree Wellness franchisee is granted a specific area where neither the franchisor nor its affiliates will operate or franchise another Degree Wellness studio. This protection is contingent on the franchisee's full compliance with the Franchise Agreement. The franchisee's rights are limited to the physical location of their studio, and the protected territory ensures a degree of exclusivity within that defined area.
However, Degree Wellness retains significant rights outside the Protected Territory. They can operate or franchise other studios, engage in other healthcare-related businesses under different trademarks, and utilize various distribution channels, including the internet, to sell products. They also reserve the right to be acquired by a business that competes with the franchisee, even within the Protected Territory. This reservation of rights means that while the franchisee has some territorial protection, Degree Wellness maintains considerable flexibility to expand and diversify its business, potentially impacting the franchisee's market.
It is important for a prospective Degree Wellness franchisee to carefully review Exhibit 1 and understand the exact boundaries of the Protected Territory before signing the Franchise Agreement. They should also consider the potential impact of Degree Wellness's reserved rights on their business. Understanding these factors is crucial for assessing the long-term viability and potential of the franchise.