Under what circumstances can Degree Wellness terminate the Development Agreement due to 'cause' related to non-curable defaults?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Development Agreement | Summary | |
|---|---|---|---|
| during the Development Period (including any monetary default) and you fail to cure such default within 30 days of receiving notice. | |||
| h. | "Cause" defined – non-curable defaults | Section 6.2 | We may terminate the Development Agreement if you cease to actively engage in development activities in the Site Selection Area or otherwise abandon your development business for three consecutive months, or any shorter period that indicates an intent by you to discontinue development of the Studios within the Site Selection Area; you become insolvent or are adjudicated bankrupt, or if any action is taken by you, or by others against the you, under any insolvency, bankruptcy or reorganization act, or if you make an assignment for the benefit or creditors or a receiver is appointed by you; and any Franchise Agreement that is entered into in order to fulfill your development obligations under the Development Agreement is terminated or subject to termination by us, pursuant to the terms of that Franchise Agreement. |
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, Degree Wellness can terminate the Development Agreement if certain non-curable defaults occur. These defaults, as outlined in Section 6.2 of the Development Agreement, include the developer ceasing to actively engage in development activities in the Site Selection Area, or otherwise abandoning their development business for three consecutive months, or any shorter period that indicates an intent to discontinue development of the Studios within the Site Selection Area.
Additionally, Degree Wellness may terminate the agreement if the developer becomes insolvent or is adjudicated bankrupt, or if any action is taken by the developer, or by others against the developer, under any insolvency, bankruptcy, or reorganization act. This also applies if the developer makes an assignment for the benefit of creditors or a receiver is appointed by them.
Furthermore, Degree Wellness can terminate the Development Agreement if any Franchise Agreement that is entered into in order to fulfill the developer's obligations under the Development Agreement is terminated or subject to termination by Degree Wellness, pursuant to the terms of that Franchise Agreement. These conditions provide Degree Wellness with specific protections in cases where the developer's ability or willingness to fulfill their development obligations is compromised.