Under what condition might Degree Wellness not approve a transfer of the franchise?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
If you and your Principal Owners are in full compliance with this Agreement, both monetary and otherwise, we will not unreasonably withhold our approval of a Transfer that meets all the applicable requirements of this Section 14.
The Proposed New
Owner must be of good moral character and otherwise meet our then applicable standards for Degree Wellness Studio franchisees. For any proposed Transfer, in addition to waiving our right of first refusal, all of the following conditions must be met before or at the time of the Transfer:
a. in our belief and judgment, the Proposed New Owner must have sufficient business experience, aptitude, and financial resources to operate the Franchise;
b. you must pay any amounts owed for purchases from us and our affiliates, and any other amounts owed to us or our affiliates which are unpaid, including any Initial Franchisee Fee, Continuing Franchise Fees, and Fund contributions;
c. the Proposed New Owner's directors and such other personnel as we may designate must have successfully completed our Initial Training program and shall be legally authorized and have all licenses necessary to perform the services offered by the Franchise.
Source: Item 10 — Financing (FDD pages 31–32)
What This Means (2025 FDD)
According to Degree Wellness's 2025 Franchise Disclosure Document, Degree Wellness may withhold approval of a franchise transfer if the franchisee and their Principal Owners are not in full compliance with the Franchise Agreement, both financially and otherwise. This means that if the franchisee has any outstanding debts to Degree Wellness or its affiliates, or if they have violated any other terms of the agreement, the transfer may be denied.
In addition to compliance with the agreement, Degree Wellness also requires that the proposed new owner meet certain standards. The proposed new owner must be of good moral character and meet Degree Wellness's standards for franchisees. Degree Wellness must believe the proposed new owner has sufficient business experience, aptitude, and financial resources to operate the franchise. Furthermore, the proposed new owner's directors and designated personnel must complete the initial training program and have all necessary licenses to perform the services offered by the franchise.
These conditions ensure that any new franchisee taking over a Degree Wellness location is well-qualified and capable of maintaining the brand's standards. It also protects Degree Wellness from potential legal issues or damage to its reputation that could arise from a poorly managed franchise. The franchisee must also pay any outstanding amounts owed to Degree Wellness and its affiliates, including franchise fees and fund contributions.
For a prospective franchisee looking to sell their Degree Wellness franchise in the future, it is crucial to remain in full compliance with the franchise agreement and ensure that any potential buyer meets the criteria set by Degree Wellness. Failure to meet these conditions could result in the denial of the transfer and potential loss of the sale.