Under what circumstances related to criminal convictions can the Degree Wellness franchise agreement be terminated?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Franchise Agreement | Summary |
|---|---|---|
| under the Franchise Agreement in any | ||
| respect, then all rights granted to you | ||
| under the Franchise Agreement shall | ||
| immediately | ||
| and | ||
| automatically | ||
| terminate and revert to us without | ||
| further notice to you or action on our | ||
| part. | ||
| A termination of your Franchise | ||
| Agreement will not automatically | ||
| result | ||
| in | ||
| a | ||
| termination | ||
| of | ||
| your | ||
| Development | ||
| Agreement, | ||
| if | ||
| applicable. | ||
| g. "Cause" defined –curable defaults | Section 15 | You do not pay us within 10 days after written notice; you do not comply with any other provision of the Franchise Agreement or specification, standard, or operating procedure and do not correct such failure within 30 days after written notice. |
| h. "Cause" defined – non-curable defaults | Section 15 | You fail to timely develop or open the franchise; you (or any individuals required to attend) fail to attend and/or successfully complete any required initial training or subsequent mandatory training; you abandon, surrender, transfer control of or do not actively operate the franchise or lose the right to occupy the franchise location; you or any Principal Owner make an unauthorized transfer or assignment of the franchise or its assets; you are adjudged a bankrupt, become insolvent, or make an assignment for the benefit of creditors, or you fail to satisfy any judgment rendered against you for a period of 30 days after all appeals have been exhausted; you use, sell, or distribute unauthorized products, or use any patient referral or marketing services that has not been formally approved by us in writing and in advance for your franchise or for the franchise system as a whole; you or your Principal Owners are convicted |
Source: Item 17 — Renewal, Termination, Transfer, and Dispute Resolution (FDD pages 49–59)
What This Means (2025 FDD)
According to Degree Wellness's 2025 Franchise Disclosure Document, the franchise agreement can be terminated if you or your Principal Owners are convicted of a crime. This is considered a non-curable default, meaning there is no opportunity to correct the issue and prevent termination.
This provision is fairly standard in franchise agreements. Franchisors want to protect their brand reputation and avoid association with individuals who have criminal records. The definition of "Principal Owners" is important here, as the conviction of any such owner can trigger termination, not just the franchisee themselves.
Prospective Degree Wellness franchisees should carefully consider this clause and ensure that they and all Principal Owners maintain a clean criminal record. Failure to do so could result in the termination of the franchise agreement and the loss of their investment.