Under what circumstances will all rights granted to a Degree Wellness franchisee under the agreement automatically terminate?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
15.3 Our Remedies upon Termination. In the event that we terminate this Agreement under Section 15.1 or other applicable provisions of this Agreement, but excluding the circumstances described in Section 15.2, all rights granted to you under this Agreement shall immediately and automatically terminate and revert to us, and we shall be entitled, to recover from you any and all of the foregoing:
a. in those states in which such termination fees are enforceable, to receive from you a termination fee in the amount equal to one-half (1/2) of our then-current initial franchise fee for new Degree Wellness Studio franchises; and
b. an amount equal to your average monthly Continuing Franchise Fee, Fund contribution, and Technology Fee multiplied by the number of months remaining in the Term of this Agreement, discounted by a present value discount factor of five percent (5%) and any additional actual, economic, consequential and indirect damages incurred by us including, without limitation, the loss of future revenues (which we both agree include the expected amount of Continuing Franchise Fees, Fund contributions, and Technology Fees payable by you for the remainder of the Term of this Agreement); and
c. all costs and expenses, including attorneys' fees, incurred in connection with the termination, collection of the termination fee and/or damages, and audit fees and expenses.
Source: Item 23 — Receipts (FDD pages 66–257)
What This Means (2025 FDD)
According to the 2025 Degree Wellness Franchise Disclosure Document, if Degree Wellness terminates the agreement under Section 15.1 or other applicable provisions of the agreement, excluding circumstances described in Section 15.2, all rights granted to the franchisee under the agreement will immediately and automatically terminate and revert to Degree Wellness.
This means that a Degree Wellness franchisee's rights can be terminated if they fail to meet the obligations outlined in the franchise agreement. Upon termination, Degree Wellness may recover a termination fee from the franchisee. This fee is equal to one-half of the then-current initial franchise fee for new Degree Wellness Studio franchises.
In addition to the termination fee, Degree Wellness can also recover an amount equal to the franchisee's average monthly Continuing Franchise Fee, Fund contribution, and Technology Fee multiplied by the number of months remaining in the Term of the Agreement, discounted by a present value discount factor of five percent, as well as any additional actual, economic, consequential and indirect damages incurred by Degree Wellness. The franchisee is also responsible for all costs and expenses, including attorneys' fees, incurred in connection with the termination, collection of the termination fee and/or damages, and audit fees and expenses.