Is Degree Wellness required to pay a security deposit if it assumes the lease?

According to Degree Wellness's 2025 Franchise Disclosure Document, if Degree Wellness or an affiliate assumes a franchisee's lease, neither Degree Wellness nor its affiliate is required to pay the landlord a security deposit. This clause is specifically in reference to a situation where Degree Wellness steps in to take over the lease obligations from a franchisee.

This provision could be beneficial for Degree Wellness as it reduces the financial burden associated with assuming a lease. Security deposits can be substantial, and this waiver could represent a significant cost saving for Degree Wellness. It also incentivizes the landlord to allow Degree Wellness to assume the lease, as the landlord may be more willing to work with Degree Wellness if they do not require a security deposit.

For a prospective franchisee, this clause offers some reassurance that Degree Wellness is willing to support its franchisees in situations where the franchisee can no longer fulfill their lease obligations. However, it is important to note that this does not relieve the franchisee of their initial responsibility to pay a security deposit when first entering into the lease agreement. The franchisee should still carefully review the lease agreement and understand all of their financial obligations to the landlord.