Does Degree Wellness require the developer to fulfill any obligations upon termination or nonrenewal of the Development Agreement?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
cept | | | | for | | | | matters regulated by the United States | | | | Trademark Act (subject to applicable | | | | state law). |
Development Agreement
| Provision | Section in Development Agreement | Summary | |
|---|---|---|---|
| a. | Length of the franchise term | Section 6.1 | The term begins on the effective date and ends on the earlier of the date you open the last Studio you are required to open under your Development Schedule or the expiration of your Development Schedule. |
| b. | Renewal or extension of the term | Not Applicable | Not Applicable |
| c. | Requirements for franchisee to renew or extend | Not Applicable | Not Applicable |
| d. | Termination by franchisee | Not Applicable | Franchisees may terminate the agreements under any grounds permitted by state law. |
| e. | Termination by franchisor without cause | Not Applicable | Not Applicable |
| f. | Termination by franchisor with cause | Section 6.2 | We may terminate your Development Agreement with cause as described in (g)-(h) of this Item 17 Chart. |
| g. |
Source: Item 17 — Renewal, Termination, Transfer, and Dispute Resolution (FDD pages 49–59)
What This Means (2025 FDD)
According to Degree Wellness's 2025 Franchise Disclosure Document, the table in Item 17 outlines various provisions related to the Development Agreement, including termination conditions. However, it explicitly states under the provision "Developer's obligations on termination/ nonrenewal" that it is "Not Applicable." This indicates that the document does not specify any obligations for the developer upon termination or nonrenewal of the Development Agreement.
This "Not Applicable" designation suggests that Degree Wellness does not impose any specific requirements or duties on the developer once the Development Agreement concludes, either through termination or non-renewal. This could mean that there are no continuing obligations related to non-compete, transfer of assets, or other post-agreement activities typically found in franchise agreements.
However, prospective Degree Wellness developers should confirm this interpretation with the franchisor. While the FDD indicates no explicit obligations, there might be implied or unwritten expectations. It would be prudent to seek clarification on whether any actions, such as returning confidential information or ceasing use of proprietary materials, are expected even though not formally documented in the Development Agreement.