For Degree Wellness, what is the timeframe for disclosing commencement of any action that may adversely affect the Studio's operation?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
- (c) Licensed Provider shall immediately disclose to Management Company in writing as soon as is possible after, but in any case within 5 days of, (1) the commencement of any action, suit, or proceeding, and/or of the issuance of any order, writ, injunction, award, or decree of any court, agency, or other governmental unit (including regulatory boards or professional groups), that may adversely affect Licensed Provider and/or the Studio's operation, financial condition, or reputation, including, without limitation, any and all claims of malpractice brought against Licensed Provider or any person affiliated with Licensed Provider, regardless of the nature of the claim, anticipated outcome or remedies sought; and/or (2) Licensed Provider's receipt or knowledge any notice of violation of any law, ordinance, or regulation relating to health or safety.
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, a Licensed Provider must disclose certain adverse actions to the Management Company within a specific timeframe. Specifically, the Licensed Provider is required to provide written notice as soon as possible, but no later than 5 days after the commencement of any action, suit, or proceeding. This includes the issuance of any order, writ, injunction, award, or decree from any court, agency, or governmental unit that could negatively impact the Licensed Provider, the Studio's operations, its financial condition, or its reputation. This also encompasses any malpractice claims against the Licensed Provider or affiliated individuals, irrespective of the claim's nature, anticipated outcome, or remedies sought.
This disclosure requirement also extends to the Licensed Provider's receipt of or knowledge of any notice of violation of any law, ordinance, or regulation pertaining to health or safety. The promptness of this disclosure is crucial, as it allows the Management Company to take timely action to mitigate any potential damage to the Degree Wellness brand, the System, or the Studio's operations. The written notice ensures a clear record of the disclosure and its timing.
For a prospective Degree Wellness franchisee, this means they must be vigilant in monitoring any legal or regulatory issues that could affect their business. They must establish internal procedures to ensure that any such issues are promptly identified and reported to the Management Company within the stipulated 5-day period. Failure to comply with this disclosure requirement could potentially lead to penalties or other adverse consequences under the Studio Management Agreement.