What is the relationship between the general release agreement and the Degree Wellness franchise agreement renewal?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
pany incurred a net loss of $887,276 for the period April 1, 2024 through December 31, 2024. The Company also had members' deficit of $440,264 as of December 31, 2024.
At December 31, 2024, Franworth, LLC and Everyday Holdings LLC were members of the Company. The members have historically provided the necessary working capital to meet the Company's short-term obligations and the necessary capital to offset the net operating losses incurred by the Company. The members have pledged to continue their financial support, and management believes that these actions will enable the Company to continue its operations through March 24, 2026.
EXHIBIT H
GENERAL RELEASE AGREEMENT
(For Studio Franchises)
| THIS GENERAL RELEASE AGREEMENT ("Release") is made and entered into this day of, 20, by and between Degree Wellness Franchise, |
|---|
| LLC, |
| a |
| Delaware |
| limited |
| liability |
| company |
| ("Franchisor"), |
| and |
| , |
| a |
| corporation/limited |
| liability |
| company/partnership |
| (circle |
| one) |
| ("Franchisee"), |
| and |
| each |
| shareholder/member/partner of Franchisee (individually, an "Owner," |
| and collectively, |
| the "Owners") (collectively, Franchisor, Franchisee, and the Owners are referred to |
| hereinafter as the "Parties"). |
| WITNESSETH |
| WHEREAS, the Parties previously entered into that certain Franchise Agreement, |
| dated, 20 (the "Agreement") granting Franchisee a single |
| Degree Wellness |
| Studio |
| franchise of Franchisor for a specific Term (as defined in the |
| Agreement); and |
| WHEREAS, Franchisee desires to renew the Agreement for an additional Term (as |
| defined in the Agreement); and |
| WHEREAS, Section 2.4(c) of the Agreement requires Franchisee and each of its |
| Owners to execute, in favor of Franchisor and its officers, directors, agents, and employees, |
| and Franchisor's affiliates and their officers, directors, agents, and employees, as a |
| condition to renew the Agreement, a general release from liability of all claims that |
| Franchisee and its Owners may have against Franchisor and its affiliates and their |
| respective officers, directors, employees, and agents; and |
| WHEREAS, the Parties desire to enter into this Release to comply with the |
| requirements of the Agreement and preserve Franchisee's eligibility to renew the |
| Agreement. |
| NOW, THEREFORE, in consideration of the mutual agreements contained herein |
| and other valuable consideration, the Parties hereby agree as follows: |
| 1. |
| Recitals. The foregoing Recitals are incorporated into and made part of this |
| Release. |
| 2. |
| Release. Franchisee and each Owner, on behalf of themselves and their |
| present or former affiliated entities, predecessors, successors, assigns, heirs, and personal |
| representatives, as well as all other persons, firms, corporations, limited liability |
| companies, associations or partnerships or other affiliated entities claiming by or through |
them (the "Releasing Entities"), hereby fully release Franchisor and its present or former affiliates entities and their respective officers, directors, shareholders, partners, members, employees, contractors, agents, predecessors, successors, assigns, attorneys, representatives, heirs, and personal representatives (the "Released Entities") from any and all liabilities, claims, demands, debts, damages, obligations and causes of action of any nature or kind, whether presently known or unknown, which the Releasing Entities, or any of them, may have against the Released Entities as of the date this Agreement is executed,
except for any claims under the Illinois Franchise Disclosure Act, the Indiana Franchise Act, the Maryland Franchise Registration and Disclosure Law, the Minnesota Franchise Law (Minnesota Statutes 1973 Supplement, sections 80C.01 to 80C.22), or the Washington Franchise Investment Protection Act.
3. Miscellaneous.
- A.
Source: Item 23 — Receipts (FDD pages 66–257)
What This Means (2025 FDD)
According to Degree Wellness's 2025 Franchise Disclosure Document, a general release agreement is a prerequisite for franchise agreement renewal. Specifically, Section 2.4(c) of the existing franchise agreement mandates that the franchisee and their owners must execute a general release in favor of Degree Wellness and its affiliates as a condition for renewing the agreement. This release covers any claims the franchisee and their owners may have against Degree Wellness and its associated parties.
The purpose of this requirement is to comply with the terms of the existing agreement and to ensure the franchisee remains eligible for renewal. The general release agreement confirms that the franchisee and their owners relinquish any potential claims against Degree Wellness, which is a condition Degree Wellness sets for allowing the franchise agreement to be renewed for an additional term.
Furthermore, to renew the Degree Wellness franchise, the franchisee and their principal owners must execute the then-current form of franchise agreement and any related ancillary agreements. While the initial franchise fee is waived upon renewal, a renewal fee of $10,000.00 is required when signing the renewal agreement. The terms of the renewed franchise agreement may differ significantly from the original, potentially including increased continuing franchise fees and fund contributions. The franchisee's right to renew is contingent upon accepting these new terms and executing the general release.