Under what circumstances must I pay a termination fee to Degree Wellness, and what additional costs might I incur?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
em 11 for information about advertising cooperatives.
- (5) You must pay the termination fee, plus any costs and attorneys' fees incurred by us, if you improperly attempt to terminate or close your Studio or franchise before your term expires, or we terminate your Franchise Agreement for any reason set forth in the Franchise Agreement. We may also recover from you any damages suffered by us (e.g., any actual, economic, consequential, and indirect damages incurred by us including, without limitation, the loss of future revenues) resulting from your improper or wrongful termination of the franchise. Termination fees may be unenforceable in certain states. See Item 17 for additional information.
Item 7
ESTIMATED INITIAL INVESTMENT YOUR ESTIMATED INITIAL INVESTMENT
Single Studio
| Type of Expenditure | Amount | Method of Payment | When Due | To Whom Payment Is To | |
|---|---|---|---|---|---|
| Be Made | |||||
| Franchise License Fee (1) | $49,500 to $49,500 | Lump Sum | At signing of Franchise Agreement | Us | |
| Initial Training Fee | $8,000 to $8,000 | Lump Sum | At signing of Franchise Agreement | Us | |
| Training Program Expenses (2) | $1,500 to $5,000 | As agreed | As incurred | Third-party providers, including airline, lodging and meals. | |
| Studio Layout, Architect, Engineer, Drawings, and Permits (3) | $19,250 to $21,500 | As agreed | As incurred | Approved Supplier and Third Party Providers | |
| R/E & Construction Mgt | $20,500 to $20,500 | Lump Sum | As incurred | Approved Supplier | |
| Fee (4) | |||||
| Lease - Security Deposit | $11,318 to $34,668 | As agreed | When securing the | Third Party Provider | |
| (3 months) (5) | premises | ||||
| Initial Equipment Package | $13,620 to $145,709 As agreed, invoiced or | As incurred | Approved Supplier | ||
| (6) | arranged | ||||
| Leasehold Improvements | $138,952 to $384,621 | As arranged | As invoiced | Third Party Provider | |
| (7) | |||||
| Furniture, Fixtures, and | $29,629 to $40,019 | As agreed | As invoiced | Us and Approved Supplier | |
| Equipment (FFE) (8) | |||||
| Point of Sale System, | $3,850 to $4,250 | As agreed | As incurred | Approved Supplier | |
| Hardware, Software and | |||||
| Installation (9) | |||||
| Initial Inventory & | $9,531 to $11,092 | As agreed, invoiced or | As incurred | Approved Supplier | |
| Supplies (10) | arranged | ||||
| Professional Fees & | $2,586 to $5,000 | As agreed | As incurred | Approved Supplier | |
| Licenses (11) | |||||
| Presale Marketing (12) | $12,000 to $15,458 | As agreed | Before opening | Third Party Provider | |
| Insurance (13) | $1,023 to $2,340 | As agreed | As invoiced | Third Party Provider | |
| Exterior Signage (14) | $3,318 to $9,675 | As agreed | As incurred | Approved Supplier |
| Additional Funds (3 Months)(15) | | Varies, but expected within first 3 months of operations | Business personnel; Landlord; Approved Suppliers; Third-Party Provider(s) and/or Providers; Utility Providers; Us; Etc.
Source: Item 6 — Other Fees (FDD pages 14–21)
What This Means (2025 FDD)
According to Degree Wellness's 2025 Franchise Disclosure Document, a franchisee must pay a termination fee, along with any associated costs and attorney's fees incurred by Degree Wellness, if the franchisee improperly attempts to terminate or close their studio or franchise before the term expires. This also applies if Degree Wellness terminates the Franchise Agreement for any reason outlined within the agreement.
In addition to the termination fee, Degree Wellness may seek to recover damages suffered as a result of the improper or wrongful termination. These damages can include actual, economic, consequential, and indirect damages, including the loss of future revenues. It is important to note that the enforceability of termination fees can vary by state, so franchisees should be aware of the regulations in their specific location.
Furthermore, if Degree Wellness has to enforce the Franchise Agreement or defend its actions related to a franchisee's breach of the agreement, the franchisee will be responsible for all legal costs and attorney's fees incurred by Degree Wellness. Similarly, if Degree Wellness obtains an injunction or order of specific performance against the franchisee, the franchisee will be liable for all amounts incurred by Degree Wellness in obtaining that injunction or specific performance. This includes attorneys' and expert witness fees, costs of investigation and proof of facts, court costs, other litigation expenses, travel and living expenses, and any damages incurred by Degree Wellness as a result of the franchisee's breach.