Under what conditions can Degree Wellness waive a provision of the franchise agreement?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
Whenever this Agreement gives Degree Wellness discretion to take an action or make a decision, Degree Wellness will be allowed to take or make (or refrain from taking or making) that action or decision based on its business judgment. Even if Degree Wellness has numerous motives for a particular action or decision and/or there are other reasonable and/or arguably preferable alternatives to a particular action or decision, so long as at least one motive is a reasonable business justification, the action or decision will not be subject to challenge for abuse of discretion. IF THE EXERCISE OF DEGREE WELLNESS'S DISCRETION AS TO ANY MATTER IS CHALLENGED, THE PARTIES EXPRESSLY DIRECT THE TRIER OF FACT THAT DEGREE WELLNESS'S RELIANCE ON A BUSINESS REASON IN THE EXERCISE OF ITS DISCRETION IS TO BE VIEWED AS A REASONABLE AND PROPER EXERCISE OF DEGREE WELLNESS'S DISCRETION, WITHOUT REGARD TO WHETHER OTHER REASONS FOR ITS DECISION MAY EXIST AND WITHOUT REGARD TO WHETHER THE TRIER OF FACT WOULD INDEPENDENTLY ACCORD THE SAME WEIGHT TO THE BUSINESS REASON.
Source: Item 23 — Receipts (FDD pages 66–257)
What This Means (2025 FDD)
Based on the 2025 FDD, Degree Wellness retains considerable discretion in enforcing the franchise agreement. Specifically, section 17.19 states that Degree Wellness can make decisions or take actions (or refrain from doing so) based on its business judgment. This means that Degree Wellness has the flexibility to adapt to unforeseen circumstances or to work with franchisees on a case-by-case basis.
According to the FDD, even if there are multiple reasons for a decision, as long as one motive is a reasonable business justification, the decision will not be subject to challenge for abuse of discretion. This clause protects Degree Wellness from legal challenges if a franchisee disagrees with a decision, provided Degree Wellness can demonstrate a reasonable business rationale. The FDD emphasizes that if Degree Wellness's discretion is challenged, the reliance on a business reason should be viewed as a reasonable and proper exercise of discretion, regardless of other potential reasons or whether the challenger would have made the same decision.
This discretion extends to various aspects of the franchise agreement, potentially including enforcement of certain operational standards, marketing requirements, or other contractual obligations. However, the FDD does not explicitly state that Degree Wellness can 'waive' a provision. Instead, it outlines the circumstances under which Degree Wellness can exercise its judgment in enforcing the agreement. A prospective franchisee should seek clarification from Degree Wellness regarding specific scenarios where flexibility might be applied and what criteria would be considered.
While this clause provides Degree Wellness with significant latitude, it also implies a degree of responsibility to act reasonably and in good faith. Franchisees should be aware of this clause and understand that Degree Wellness's decisions are likely to be upheld as long as they are based on a reasonable business justification. This underscores the importance of maintaining open communication with Degree Wellness and addressing any concerns proactively.