Under what circumstances is a Degree Wellness franchisee required to pay the Insurance Reimbursement fee?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
us or our affiliates. |
| Type of Fee (1) | Amount | Due Date | Remarks |
|---|---|---|---|
| Audit Expenses | Cost of audit and inspection (currently $1,200), plus any reasonable accounting and legal expenses | On demand | Payable if Continuing Franchise Fee or Fund contribution is understated by 2% or more, or you fail to submit required reports or financial statements. |
Source: Item 6 — Other Fees (FDD pages 14–21)
What This Means (2025 FDD)
According to Degree Wellness's 2025 Franchise Disclosure Document, the Insurance Reimbursement fee is charged to franchisees who fail to maintain the required insurance coverage. If a franchisee does not maintain the required insurance, Degree Wellness has the right to obtain the necessary coverage on behalf of the franchisee. In this case, the franchisee is responsible for reimbursing Degree Wellness for the amount of the unpaid premiums and any related costs incurred to obtain the coverage. This fee is due on demand.
This policy ensures that all Degree Wellness locations maintain adequate insurance protection, which is crucial for protecting the brand's reputation and mitigating potential liabilities. Franchisees should carefully review the insurance requirements outlined in the Franchise Agreement to avoid incurring this fee. Maintaining the required insurance coverage is a standard requirement in franchising, as it protects both the franchisee and the franchisor from financial losses due to unforeseen events.
For a prospective Degree Wellness franchisee, understanding the specific insurance requirements and ensuring compliance is essential for managing costs and avoiding penalties. The franchisee should clarify with Degree Wellness what specific insurance policies are required, the minimum coverage amounts, and any approved insurance providers to ensure they meet the franchisor's standards. Failing to do so can result in unexpected expenses and potential disruptions to the business.