What is the relationship between the Degree Wellness Franchise Agreement and the Transfer Agreement?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
The Initial Term will begin on the Agreement Date, unless you are assuming the Franchise pursuant to a Transfer, in which case the length of the Initial Term shall be determined by the applicable Transfer Agreement.
require the Proposed New Owner to sign in connection with the Transfer, and containing a general release of any claims that you may have against us.
- j. the Franchise shall have been determined by us to contain all equipment and fixtures in good working condition, as were required at the initial opening of the Franchise. The Proposed New Owner shall have agreed, in writing, to make such reasonable capital expenditures to remodel, equip, modernize and redecorate the interior and exterior of the premises in accordance with our then existing plans and specifications for a Degree Wellness Studio franchise, and shall have agreed to pay our expenses for plan preparation or review, and site inspection.
- k. Upon receiving our consent for the Transfer or sale of the Franchise, the Proposed New Owner shall agree to assume all of your obligations under this Agreement in a form acceptable to us, and/or, at our option, shall agree to execute a new Franchise Agreement with us in the form then being used by us. We may, at our option, require that you guarantee the performance, and obligations of the Proposed New Owner.
- 14.7 Effect of Consent to Transfer. Our consent to a proposed Transfer pursuant to this Section 14 will not constitute a waiver of any claims we may have against you or any Principal Owner, nor will it be deemed a waiver of our right to demand exact compliance with any of the terms or conditions of this Agreement by the Proposed New Owner.
Source: Item 23 — Receipts (FDD pages 66–257)
What This Means (2025 FDD)
According to Degree Wellness's 2025 Franchise Disclosure Document, the Transfer Agreement is relevant when a franchisee transfers their existing franchise to a new owner. The Initial Term of the franchise, which is typically 10 years from the Agreement Date, may be affected by a Transfer Agreement. If a franchise is assumed through a transfer, the length of the Initial Term is determined by the applicable Transfer Agreement, not necessarily starting anew. This means the new owner may not get a full 10-year term.
Specifically, when a franchisee seeks to transfer their Degree Wellness franchise, the franchisor may require the Proposed New Owner to sign documents related to the transfer, including a general release of claims against the franchisor. The franchisor also assesses whether the franchise contains all required equipment and fixtures in good working condition. The Proposed New Owner must agree to make necessary capital expenditures to remodel, equip, modernize, and redecorate the premises according to Degree Wellness's standards, and cover the franchisor's expenses for plan preparation, review, or site inspection.
Furthermore, the Proposed New Owner must agree to assume all of the transferring franchisee's obligations under the original Franchise Agreement, or, at Degree Wellness's option, execute a new Franchise Agreement. Degree Wellness may also require the original franchisee to guarantee the performance and obligations of the Proposed New Owner. This ensures that the standards and obligations of the franchise system are maintained even with a change in ownership. The franchisor's consent to a transfer does not waive any claims they may have against the original franchisee or any Principal Owner, nor does it waive their right to demand compliance from the new owner.