What is the purpose of the Maryland Amendment to the Degree Wellness Franchise Agreement?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
MARYLAND AMENDMENT TO DEVELOPMENT AGREEMENT
THIS AMENDMENT TO DEVELOPMENT AGREEMENT ("Amendment") dated , is intended to be a part of, and by this reference is incorporated into that certain Development Agreement (the "Development Agreement") dated, by and between Degree Wellness Franchise, LLC ("Franchisor"), a Delaware limited liability company, with its principal office in Jacksonville, Florida, and ("you" or "Developer"). Defined terms contained in the Development Agreement shall have the identical meanings in this Amendment. Item 2 of the Development Agreement is supplemented by the following: Based upon the franchisor's financial condition, the Maryland Securities Commissioner has required a financial assurance. Therefore, all initial fees and payments owed by franchisees shall be deferred until the franchisor completes its pre-opening obligations under the franchise agreement. "In addition, all development fees and initial payments by area developers shall be deferred until the first franchise under the development agreement opens. IN WITNESS WHEREOF, the parties have executed this Amendment on the date first shown above. DEVELOPER DEGREE WELLNESS FRANCHISE, LLC
Source: Item 23 — Receipts (FDD pages 66–257)
What This Means (2025 FDD)
According to Degree Wellness's 2025 Franchise Disclosure Document, the Maryland Amendment to the Development Agreement addresses financial assurance requirements set by the Maryland Securities Commissioner due to the franchisor's financial condition. Specifically, the amendment ensures that all initial fees and payments owed by franchisees are deferred until Degree Wellness completes its pre-opening obligations under the franchise agreement. This deferral also applies to development fees and initial payments by area developers, which are postponed until the first franchise under the development agreement opens.
This amendment protects prospective Degree Wellness franchisees in Maryland by delaying their financial obligations until the franchisor fulfills its initial responsibilities. This lessens the financial risk for the franchisee, as they are not required to pay fees before Degree Wellness has met its pre-opening obligations. It also provides a safeguard in case Degree Wellness experiences financial difficulties before the franchise location is ready to open.
Additionally, the Maryland Amendment includes provisions related to the Maryland Franchise Registration and Disclosure Law. It states that the franchisee's rights under Section 14-216(c)(25) of this law are not reduced or abrogated, including the right to submit matters to Maryland courts. Any claims arising under this law must be brought within three years after the franchise is granted. The amendment also specifies that no statement or acknowledgment signed by the franchisee can waive claims under applicable state franchise law or disclaim reliance on statements made by Degree Wellness.
Furthermore, the amendment addresses dispute resolution, noting a potential conflict between the franchise agreement's arbitration requirement and Maryland franchise regulations, which prohibit requiring franchisees to waive their right to file a lawsuit in Maryland for violations of Maryland Franchise Law. The amendment clarifies that its provisions are effective only to the extent that they independently meet the jurisdictional requirements of the Maryland Franchise Registration and Disclosure Law. These stipulations collectively aim to protect the legal rights of Degree Wellness franchisees in Maryland and ensure compliance with state franchise regulations.