What is the purpose of the South Dakota Amendment to the Degree Wellness Franchise Agreement?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
SOUTH DAKOTA AMENDMENT TO FRANCHISE AGREEMENT
THIS AMENDMENT TO FRANCHISE AGREEMENT ("Amendment") dated , is intended to be a part of, and by this reference is incorporated into that certain Development Agreement (the "Franchise 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 6 until the franchisor completes its pre-opening obligations under the franchise agreement. first franchise under the development agreement opens. above. of the Franchise Disclosure Document is supplemented by the following: Based upon the franchisor's financial condition, the South Dakota Securities Regulation Office has required a financial assurance. Therefore, all initial fees and payments owed by franchisees shall be deferred "In addition, all development fees and initial payments by area developers shall be deferred until the
Source: Item 23 — Receipts (FDD pages 66–257)
What This Means (2025 FDD)
According to the 2025 Degree Wellness Franchise Disclosure Document, the South Dakota Amendment to the Franchise Agreement addresses financial assurance requirements imposed by the South Dakota Securities Regulation Office due to the franchisor's financial condition. This 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 also applies to development fees and initial payments by area developers, which are deferred until the first franchise under the development agreement opens.
For a prospective Degree Wellness franchisee in South Dakota, this means they will not have to pay the initial franchise fee or any other initial payments until Degree Wellness has fulfilled its obligations to help them get their studio ready to open. This provides a level of financial protection for the franchisee, as they are not investing their money until Degree Wellness has demonstrated its commitment to supporting their business launch.
This type of financial assurance requirement is not uncommon in franchising, particularly when a franchisor is newer or has a less established financial history. State regulators like the South Dakota Securities Regulation Office aim to protect franchisees from investing in a franchise system that may not have the resources to adequately support its franchisees. Therefore, the South Dakota Amendment serves as a safeguard for franchisees, ensuring that their initial investment is protected until Degree Wellness fulfills its pre-opening responsibilities.