Does Degree Wellness require franchisees to use specific non-disclosure, non-solicitation, non-disparagement, and non-competition agreements for their personnel?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
- b. You acknowledge and agree that the Confidential Information belongs to us, may contain trade secrets belonging to us, and is disclosed to you or authorized for your use solely on the condition that you agree, and you therefore do agree, that you (1) will not use, directly or indirectly, the Confidential Information in any business or capacity or for any purpose other than as needed in the development and operation of the Franchise during the Term of this Agreement; (2) will maintain the absolute confidentiality of the Confidential Information during and after the Term of this Agreement and not directly or indirectly publish or otherwise disclose it to any third party; (3) will not make unauthorized copies of any portion of the Confidential Information disclosed in written form or another form or media that may be copied or duplicated; and (4) will adopt and implement all reasonable procedures, including any that we may prescribe from time to time, to prevent unauthorized use or disclosure of the Confidential Information, including without limitation restrictions on disclosure to or by your employees, and the use of non-disclosure, non-solicitation, non-disparagement and non-competition agreements we may prescribe or approve for your shareholders, partners, members, officers, directors, employees, independent contractors, or agents who may have access to the Confidential Information. You acknowledge and agree that we are
under no duty or obligation to you to enforce any such Agreements for your or our benefit. Your duties and obligations with respect to Confidential Information shall survive the Transfer, termination or expiration of this Agreement.
Source: Item 23 — Receipts (FDD pages 66–257)
What This Means (2025 FDD)
According to Degree Wellness's 2025 Franchise Disclosure Document, franchisees are required to adopt and implement reasonable procedures to prevent unauthorized use or disclosure of confidential information. These procedures include restrictions on disclosure to or by the franchisee's employees, and the use of non-disclosure, non-solicitation, non-disparagement, and non-competition agreements. Degree Wellness may prescribe or approve these agreements for the franchisee's shareholders, partners, members, officers, directors, employees, independent contractors, or agents who may have access to the Confidential Information. However, Degree Wellness is under no duty to enforce these agreements for the franchisee's or their benefit.
This means that as a Degree Wellness franchisee, you will likely need to have your personnel sign agreements that protect Degree Wellness's confidential information and restrict them from competing with the franchise, soliciting clients or employees, or making disparaging remarks about the franchise. While Degree Wellness may provide templates or approve the agreements you use, the responsibility for implementing and enforcing these agreements falls on you as the franchisee.
The FDD specifies that the franchisee's duties and obligations regarding confidential information survive the transfer, termination, or expiration of the Franchise Agreement. This highlights the importance of maintaining confidentiality even after the franchise relationship ends. Prospective franchisees should clarify with Degree Wellness the specific requirements for these agreements, including whether specific templates are mandated and what the enforcement expectations are.
It is common practice in franchising to have employees sign agreements protecting confidential information and restricting competition. This protects the franchisor's business model and trade secrets. However, the extent of the franchisor's involvement in prescribing or approving these agreements can vary. Franchisees should understand their obligations and responsibilities in this area to ensure compliance and protect the franchisor's interests.