After the termination or expiration of the Degree Wellness agreement, for how long does the non-competition covenant apply?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
- (a) Non-Competition. During the Agreement Term, Licensed Provider will not, directly or indirectly, perform services for, or have any direct or indirect interest as an owner, investor, partner, director, officer, employee, manager, consultant, representative, or agent in, any business that offers products or services the same as or similar to those offered or sold at the Studio. Licensed Provider's duties and obligations under this Section 10.3(a) shall survive for two (2) years following any termination or expiration of this Agreement; provided, however, that following such termination or expiration of this Agreement, this covenant shall only apply with respect to a competitive business that has a place of business located within a five (5) mile radius of the location of the Premises.
Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 63–66)
What This Means (2025 FDD)
According to Degree Wellness's 2025 Franchise Disclosure Document, the non-competition covenant extends for a period of two years following the termination or expiration of the franchise agreement. This means that after a franchisee's agreement ends, they are restricted from engaging in any business that offers products or services similar to those offered at a Degree Wellness studio for two years.
However, this restriction is not absolute. The non-competition covenant only applies to competitive businesses located within a five-mile radius of the original Degree Wellness studio location. This geographic limitation provides some flexibility for former franchisees who wish to remain in the health and wellness industry but need to avoid direct competition with Degree Wellness.
In addition to the non-competition covenant, the FDD also mentions non-solicitation and non-disparagement clauses that extend beyond the agreement term. These clauses prevent former franchisees from soliciting Degree Wellness's patients or making negative statements about the brand. Prospective franchisees should carefully consider these post-term obligations and how they might impact their future business endeavors.