What rights does the Degree Wellness franchise agreement grant to the franchisee regarding the operation of the franchise?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
GRANT OF FRANCHISE.
1 Term; Reference to Exhibit 1. You have applied for a franchise to own and operate a Degree Wellness Studio, and we have approved your application in reliance on all of the representations you made in that application. As a result, and subject to the provisions of this Agreement, we grant to you
- a Franchise to operate a Studio offering all products, services, and proprietary programs of ours in accordance with all elements of the System, that we may require for Degree Wellness Studios.
You must operate the Franchise at a mutually agreeable site (the "Premises") to be identified after the signing of this Agreement, and to use the System and the Marks in the operation of that Franchise, for an "Initial Term" of 10 years.
The Initial Term will begin on the Agreement Date, unless you are assuming the Franchise pursuant to a Transfer, in which case the length of the Initial Term shall be determined by the applicable Transfer Agreement.
To avoid uncertainty, the expiration date of the Initial Term is listed on Exhibit 1.
Termination or expiration of this Agreement will constitute a termination or expiration of your Franchise and the rights you received in connection with the Franchise, including your rights to use the Marks or any portion of the Confidential Information (defined below).
All references to the "Term of this Agreement" refer to the period from the Agreement Date to the date on which this Agreement actually terminates or expires.
- 2.2 Full Term Performance.
You specifically agree to be obligated to operate the Franchise, perform the obligations of this Agreement, and continuously exert your best efforts to promote and enhance the business of the Franchise for the entire Initial Term, and any subsequent renewal or extension of the Term of this Agreement.
- 2.3 Protected Territory; Reference to Exhibit 1; Reservation of Rights.
You acknowledge that the Franchise granted by this Agreement gives you the right to operate your Franchise only at the Premises.
Provided you are in full compliance with this Agreement, neither we nor our affiliates will operate or grant a franchise for the operation of another Studio franchise physically located within the territory described in Exhibit 1 (the "Protected Territory").
Source: Item 23 — Receipts (FDD pages 66–257)
What This Means (2025 FDD)
According to the 2025 Degree Wellness Franchise Disclosure Document, franchisees are granted the right to operate a Degree Wellness Studio for an initial term of 10 years. This right is contingent upon operating the studio in accordance with all elements of the Degree Wellness System, which includes offering all products, services, and proprietary programs as required by Degree Wellness. The franchise must be operated at a mutually agreeable site, and the franchisee must use the System and the Marks in the operation of that Franchise.
The Degree Wellness franchise agreement specifies that the franchisee has the right to operate their franchise only at the designated Premises. Provided the franchisee is in full compliance with the agreement, Degree Wellness will not operate or grant a franchise for another Studio physically located within the Protected Territory, which is described in Exhibit 1 of the Franchise Agreement. This protected territory offers a degree of exclusivity, preventing direct competition from other Degree Wellness franchises within a defined area.
However, the franchisee's rights are subject to several limitations and obligations. The franchisee must continuously exert their best efforts to promote and enhance the business of the Franchise for the entire Initial Term. The franchisee must also maintain the condition and appearance of the Franchise and the Premises according to Degree Wellness's standards. Furthermore, Degree Wellness retains significant control over the System, Marks, and operating standards, and the franchisee must adhere to these standards and any changes Degree Wellness may implement. Degree Wellness also has the right to approve the site for the Studio and can prescribe certain lease terms.
Termination or expiration of the Degree Wellness Franchise Agreement results in the termination or expiration of the franchisee's rights, including the right to use the Marks and any Confidential Information. The franchisee must also cease using any Confidential Information and return all copies of the Operations Manual and any written Confidential Information. These post-termination obligations highlight the importance of understanding the terms of the agreement and the potential consequences of its termination or expiration.