Under what conditions is the Degree Wellness Management Company prohibited from engaging in Studio Services or activities that constitute the practice of medicine?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
- 7.2 Management Company shall not be permitted or required to engage in the Studio Services and/or any activities that constitute the practice of medicine, so long as applicable laws
and regulations prohibit the same. Any delegation of authority by Licensed Provider to Management Company that would permit or require Management Company to practice medicine or other Studio Services at the Premises shall be prohibited. Nothing in this Agreement shall be construed to permit the Management Company to control, influence, or otherwise affect Licensed Provider's rendering of the Studio Services and any provision of this Agreement which may be interpreted or deemed to constitute Management Company's practice of medicine shall be null, void, and of no force and effect, and such invalid or unenforceable provision will be reformed and construed by limiting it so as to be valid and enforceable to the maximum extent compatible with, and possible under, applicable law.
- 7.3 THE PARTIES HAVE MADE ALL REASONABLE EFFORTS TO ENSURE THAT THIS AGREEMENT COMPLIES WITH ANY APPLICABLE STATE LAWS AND REGULATIONS THAT PROHIBIT THE CORPORATE PRACTICE OF MEDICINE MEDICINE AND FEE-SPLITTING, AND THE PARTIES HEREBY UNDERSTAND AND AGREE THAT THEY WILL COMPLY WITH ANY CHANGES TO SUCH LAWS DURING THE AGREEMENT TERM. LICENSED PROVIDER SHALL HAVE THE EXCLUSIVE CONTROL AND AUTHORITY OVER THE PRACTICE OF MEDICINE MEDICINE.
- 7.4 MANAGEMENT COMPANY SHALL HAVE NO CONTROL OR DIRECTION OVER THE NUMBER, TYPE, OR RECIPIENT OF PATIENT REFERRALS MADE BY LICENSED PROVIDER AND NOTHING IN THIS AGREEMENT SHALL BE INTERPRETED AS DIRECTING OR INFLUENCING SUCH REFERRALS. NONE OF MANAGEMENT COMPANY'S SERVICES HEREUNDER SHALL CONSTITUTE OBLIGATIONS OF MANAGEMENT COMPANY TO GENERATE PATIENTS TO LICENSED PROVIDER.
Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 63–66)
What This Means (2025 FDD)
According to Degree Wellness's 2025 Franchise Disclosure Document, the Management Company is prohibited from engaging in Studio Services or activities that constitute the practice of medicine if applicable laws and regulations prohibit such activities. This restriction ensures that the Management Company does not overstep into areas that require a licensed medical professional. Any delegation of authority from the Licensed Provider to the Management Company that would allow the Management Company to practice medicine or other Studio Services at the premises is also prohibited.
This condition is in place to comply with state laws and regulations that prohibit the corporate practice of medicine and fee-splitting. The agreement emphasizes that the Licensed Provider has exclusive control and authority over the practice of medicine. The parties involved are expected to adhere to any changes in these laws during the agreement term.
Furthermore, the Management Company has no control or direction over the number, type, or recipient of patient referrals made by the Licensed Provider. The services provided by the Management Company do not include obligations to generate patients for the Licensed Provider, ensuring that medical decisions remain independent of management influence. This protects the Licensed Provider's professional judgment and ensures ethical medical practices within the Degree Wellness studio.
In practical terms, this means a Degree Wellness franchisee operating the Management Company side of the business must be careful not to interfere with the medical judgment or clinical decisions of the licensed medical provider. The Management Company's role is strictly administrative and supportive, not clinical.