Under the Degree Wellness Agreement, can Degree Wellness file financing statements without the franchisee's signature?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
You agree to execute such financing statements, instruments, and other documents, in a form satisfactory to us, that we deem necessary so that we may establish and maintain a valid security interest in and to these assets, and you authorize us to file, without your signature, such financing statements as we shall deem necessary or advisable to reflect the security interest granted herein.
Source: Item 23 — Receipts (FDD pages 66–257)
What This Means (2025 FDD)
According to Degree Wellness's 2025 Franchise Disclosure Document, franchisees agree to execute financing statements and other documents that Degree Wellness deems necessary to establish and maintain a valid security interest in the franchisee's assets. The agreement explicitly states that franchisees authorize Degree Wellness to file these financing statements without requiring the franchisee's signature. This authorization extends to any financing statements Degree Wellness considers necessary or advisable to reflect the granted security interest.
This provision means that Degree Wellness has the power to protect its financial interests by securing a lien on the franchisee's assets, and it can do so without needing additional consent or signatures from the franchisee for each filing. This is a significant point for prospective franchisees, as it grants Degree Wellness considerable control over the franchisee's assets in the event of financial difficulties or non-compliance with the franchise agreement.
For a potential Degree Wellness franchisee, this clause underscores the importance of understanding the financial obligations and the extent to which Degree Wellness can exert control over their business assets. It is advisable to seek legal counsel to fully comprehend the implications of granting such broad authorization and to assess the potential risks involved. Franchisees should also ensure they maintain detailed records of all financial transactions and communications with Degree Wellness to protect their interests.