What specific covenants in Section 9 of the Degree Wellness Franchise Agreement must a franchisee continue to comply with after termination or non-renewal?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Franchise Agreement | Summary |
|---|---|---|
| Agreement, we may terminate the | ||
| Franchise Agreement. | ||
| i. Your obligations on termination/ non-renewal | Section 16 | You must pay all amounts owed to us; refrain from using our Marks, return to us or destroy (as we specify) all customer lists, forms and materials bearing our Marks or relating to the franchise; de-identify the franchise premises; return the Operations Manual; comply with covenants against competition and the non solicitation, non-disparagement, and non-disclosure covenants in Section 9 of the Franchise Agreement; and cease using all confidential information. |
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, specifically Item 17, franchisees must continue to comply with certain covenants outlined in Section 9 of the Franchise Agreement even after the agreement is terminated or not renewed. These covenants include those against competition, non-solicitation, non-disparagement, and non-disclosure.
In practical terms, this means that even after a Degree Wellness franchise closes or the agreement expires, the former franchisee is still legally bound by these specific restrictions. They cannot, for example, open a competing business, solicit Degree Wellness's employees or customers, make negative statements about the brand, or disclose confidential information they learned during their time as a franchisee.
These post-termination obligations are common in franchising to protect the brand's competitive advantage and proprietary information. Prospective Degree Wellness franchisees should carefully review Section 9 of the Franchise Agreement to fully understand the scope and duration of these restrictions, as violating them could lead to legal action by Degree Wellness.