What must the Transfer Agreement include when transferring a Degree Wellness franchise?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
an agreement with us providing that all obligations of the Proposed New Owner to make installment payments of the purchase price (and any interest on it) to you or your Principal Owners will be subordinate to the obligations of the Proposed New Owner to pay any amounts payable under this Agreement or any new Franchise Agreement that we may
require the Proposed New Owner to sign in connection with the Transfer, and containing a general release of any claims that you may have against us.
- j. the Franchise shall have been determined by us to contain all equipment and fixtures in good working condition, as were required at the initial opening of the Franchise. The Proposed New Owner shall have agreed, in writing, to make such reasonable capital expenditures to remodel, equip, modernize and redecorate the interior and exterior of the premises in accordance with our then existing plans and specifications for a Degree Wellness Studio franchise, and shall have agreed to pay our expenses for plan preparation or review, and site inspection.
- k. Upon receiving our consent for the Transfer or sale of the Franchise, the Proposed New Owner shall agree to assume all of your obligations under this Agreement in a form acceptable to us, and/or, at our option, shall agree to execute a new Franchise Agreement with us in the form then being used by us. We may, at our option, require that you guarantee the performance, and obligations of the Proposed New Owner.
- 14.6 Death and Disability. Upon the death or permanent disability of you or a Principal Owner, the executor, administrator, conservator or other personal representative of the deceased or disabled person must Transfer the deceased or disabled person's Interest within a reasonable time, not to exceed twelve (12) months from the date of death or permanent disability, to a person we have approved. Such Transfers, including without limitation transfers by a will or inheritance, will be subject to all the terms and conditions for assignments and Transfers contained in this Agreement. Failure to so dispose of an Interest within the 12-month period of time will constitute grounds for termination of this Agreement.
- 14.7 Effect of Consent to Transfer. Our consent to a proposed Transfer pursuant to this Section 14 will not constitute a waiver of any claims we may have against you or any Principal Owner, nor will it be deemed a waiver of our right to demand exact compliance with any of the terms or conditions of this Agreement by the Proposed New Owner. Unless otherwise specified in writing, you will be subject to all post-Transfer/post-termination obligations set forth in this Agreement.
15. TERMINATION OF THE FRANCHISE.
Source: Item 23 — Receipts (FDD pages 66–257)
What This Means (2025 FDD)
According to the 2025 Degree Wellness Franchise Disclosure Document, several conditions must be met when transferring a franchise. The proposed new owner must meet Degree Wellness's standards for franchisees and have sufficient business experience, aptitude, and financial resources to operate the franchise. The transferring franchisee must settle all outstanding payments owed to Degree Wellness and its affiliates, including franchise fees and fund contributions. Additionally, the new owner's directors and designated personnel must complete Degree Wellness's initial training program and possess all necessary licenses to perform the services offered by the franchise.
The transfer agreement must also ensure that the Degree Wellness studio contains all required equipment and fixtures in good working condition, as specified during the initial opening. The proposed new owner must agree in writing to make necessary capital expenditures to remodel, equip, modernize, and redecorate the studio's interior and exterior according to Degree Wellness's current standards. They must also cover Degree Wellness's expenses for plan preparation, review, and site inspection. The new owner must agree to assume all obligations under the existing franchise agreement or, at Degree Wellness's discretion, execute a new franchise agreement. Degree Wellness may also require the original franchisee to guarantee the performance and obligations of the new owner.
Furthermore, the transfer agreement must include a general release of any claims the transferring franchisee may have against Degree Wellness. These conditions ensure that the new franchisee is well-prepared and financially capable, maintaining the standards and reputation of the Degree Wellness brand. The initial term of the franchise will be determined by the transfer agreement. These stipulations protect Degree Wellness's interests and ensure a smooth transition, maintaining consistency and quality across all franchise locations.