Does Degree Wellness reserve rights not expressly granted to the developer in the agreement?

According to Degree Wellness's 2025 Franchise Disclosure Document, Degree Wellness retains rights that are not explicitly granted to the developer in the agreement. Specifically, Section 7 of the agreement states that the rights granted are non-exclusive, and Degree Wellness and its affiliates reserve all other rights not expressly granted to the developer. This means that while the developer receives certain defined rights to develop studios within a specific area, Degree Wellness maintains control over aspects of the business and territory not explicitly assigned to the developer.

This reservation of rights has several implications for potential Degree Wellness developers. It provides Degree Wellness with the flexibility to adapt its business model, explore new markets, and protect its brand. However, it also introduces an element of uncertainty for developers, as Degree Wellness could potentially take actions that impact the developer's business without violating the agreement, as long as those actions don't infringe on the specific rights granted.

For example, Degree Wellness could introduce new products or services that compete with those offered by the developer, or it could grant additional franchises in nearby areas, provided those areas are outside the developer's exclusive territory. Therefore, prospective developers should carefully consider the scope of the rights granted to them and the potential impact of Degree Wellness's reserved rights on their business.

It is common practice in franchising for franchisors to reserve certain rights to maintain control over their brand and system. However, the specific rights reserved can vary significantly from franchise to franchise. A prospective Degree Wellness developer should seek legal counsel to fully understand the implications of this clause and how it might affect their investment and operations.