Under what circumstances can Degree Wellness terminate the franchise agreement due to default?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
15.1 Event of Default. Subject to applicable law, you will be deemed to be in default under this Agreement, and we will have the right to terminate this Agreement effective upon delivery of notice of termination to you, subject only to any right to cure to the extent expressly set forth below or mandated pursuant to applicable law, if:
a. you do not develop or open the Franchise, or you (or any individuals required to attend) fail to attend and/or successfully complete any required initial training or subsequent mandatory training, in accordance with all terms and conditions (including, without limitation, time limits) provided for in this Agreement;
b. you abandon, surrender, transfer control of, lose the right to occupy the Premises of, or do not actively operate, the Franchise, or your lease for or purchase of the location of the Franchise is terminated for any reason;
c. you or your Principal Owners assign or Transfer this Agreement, any Interest, the Franchise, or assets of the Franchise without complying with the provisions of Section 14;
d. you are adjudged a bankrupt, become insolvent or make a general 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;
e. you use, sell, distribute or give away any services or products, or use any patient referral or marketing service, that has not been formally approved by us in writing and in advance for your specific Franchise or for the System as a whole;
f. you or any of your Principal Owners are convicted of or plead no contest to a felony or are convicted or plead no contest to any crime or offense that is likely to adversely affect the reputation of Degree Wellness, the Franchise, and/or the goodwill associated with the Marks, or otherwise engage in any dishonest, unethical, or other conduct that is reasonably likely to reflect materially and unfavorably on the goodwill or reputation of your Franchised Business, the Marks or the System;
g. you or any of your employees violate any health or safety law, ordinance or regulation, or operate the Franchise in a manner that presents a health or safety hazard to your customers or the public;
Source: Item 23 — Receipts (FDD pages 66–257)
What This Means (2025 FDD)
According to Degree Wellness's 2025 Franchise Disclosure Document, there are several events that can lead to the termination of the franchise agreement due to franchisee default. Degree Wellness has the right to terminate the agreement if a franchisee does not develop or open the franchise, or if required individuals fail to attend or complete the necessary initial or subsequent mandatory training within the specified time limits outlined in the agreement.
Additional circumstances that could trigger termination include abandoning the franchise, surrendering control, losing the right to occupy the premises, or failing to actively operate the franchise. Transferring the agreement, any interest, the franchise, or its assets without complying with Section 14 of the agreement also constitutes a default. Furthermore, if a franchisee is adjudged bankrupt, becomes insolvent, makes an assignment for the benefit of creditors, or fails to satisfy a judgment against them for 30 days after exhausting all appeals, Degree Wellness can terminate the agreement.
The franchise agreement can also be terminated if the franchisee uses, sells, distributes, or gives away any services or products, or uses any patient referral or marketing service, without prior written approval from Degree Wellness. Conviction of the franchisee or their principal owners of a felony, pleading no contest to any crime that could harm Degree Wellness's reputation, or engaging in dishonest or unethical conduct that reflects unfavorably on the brand can also lead to termination. Finally, violating any health or safety laws, ordinances, or regulations, or operating the franchise in a manner that poses a health or safety hazard to customers or the public, are grounds for termination.