Are there any exceptions to the minimum ownership interest requirements for each Principal Owner of a Degree Wellness franchise during the term of the agreement?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
| and the number of these Franchises that you have developed and opened for business before | | | | developing and opening the Franchise to which the Agreement corresponds. |
EXHIBIT 2 TO THE DEGREE WELLNESS FRANCHISE AGREEMENT
OWNERSHIP INTERESTS IN FRANCHISE OWNER
2-1. Full name and address of the owners of, and a description of the type of, all currently held Interests in Franchise Owner:
| 1. With respect | to the disclosures | in Item 17 of the | Disclosure Document, | the following |
|---|
Attach Additional Sheet for Principal Owners, if required.
- 2-2. Minimum individual and aggregate Principal Owner ownership percentage required at all times during the Term of this Agreement:
- 2-2.1 During the Term of this Agreement, the Principal Owners together must have a "controlling interest" (i.e., a 100 percent "ownership interest" of the equity, voting control and profits) in Franchise owner.
Source: Item 23 — Receipts (FDD pages 66–257)
What This Means (2025 FDD)
According to Degree Wellness's 2025 Franchise Disclosure Document, during the term of the agreement, the Principal Owners together must maintain a controlling interest, defined as 100 percent ownership of the equity, voting control, and profits of the Franchise owner. Unless otherwise permitted, each Principal Owner must maintain the minimum ownership interest as specified in the agreement.
However, there is an exception for minority owners, defined as persons other than the Principal Owners. Interests owned by minority owners may be transferred without Degree Wellness's advance consent unless the transfer would give the transferee and any affiliated person or group more than a collective twenty-five percent interest in the Franchise Owner. If a transfer exceeds this 25% threshold, Degree Wellness's advance written approval is required.
Prospective franchisees should be aware that any changes in ownership interests are subject to Degree Wellness's approval and must adhere to the conditions outlined in the franchise agreement. It is important to carefully review the ownership requirements and transfer restrictions to ensure compliance and avoid potential breaches of the agreement.