Under the Franchise Agreement, what obligation does a Degree Wellness franchisee undertake?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
- B. Franchisee has acquired the right and has undertaken the obligation to develop and operate a Degree Wellness Studio pursuant to the terms and conditions of a certain franchise agreement between Franchisee and Franchisor ("Franchise Agreement").
- b. From time to time we grant to persons who meet our qualifications, franchises to own and operate a Degree Wellness Studio in accordance with the System in a specified geographic territory. This
Agreement is being presented to you because of the desire you have expressed to obtain the right to develop, own, and be franchised to operate a Degree Wellness Studio (we refer to your Degree Wellness franchise hereinafter as the "Franchise" or the "Franchised Business").
c. In certain cases, where permitted by law, we may offer franchises to persons or legal entities that meet our qualifications but are not licensed to practice or provide health related care, and are willing to undertake the investment and effort to own and operate a business that will manage a Studio under the System; we refer to these businesses as "Studio Management Businesses." For example, certain states do not permit non-licensed persons to own and/or health care practices, but some states do. In states that do not permit non-licensed persons to own or operate businesses performing health care related services, a Studio Management Business may be offered. In states that do permit non-licensed persons to own and operate health care businesses, a Studio Management Business Franchise is not necessary, but may be offered by us under certain circumstances.
Therefore, during the Term of this Agreement, neither you, nor any Principal Owner, nor any member of your immediate family or of the immediate family of any Principal Owner, shall directly or indirectly perform services for, or have any direct or indirect interest as an owner, investor, partner, director, officer, employee, manager, consultant, representative, or agent in, any business that offers products or services the same as or similar to those offered or sold at Degree Wellness Studio franchises; provided, however, that the ownership of one percent (1%) or less of a publicly traded company will not be deemed to be prohibited by this Paragraph.
You agree that during the Term of this Agreement, and thereafter following any Transfer, termination or expiration of this Agreement, neither you, nor any Principal Owner, nor any member of your immediate family or of the immediate family of any Principal Owner, will directly or indirectly make any negative or critical statements to any third parties, either verbally or in any other form or media, about (a) us, the Franchise, any of our franchisees, or any of their respective products, services, businesses or business practices, or (b) the actions, operations or character of any of our or their respective owners, officers, directors, employees, consultants or agents.
You agree that during the Term of this Agreement, and thereafter for a period of two (2) years following any Transfer, termination or expiration of this Agreement, neither you, nor any Principal Owner, nor any member of your immediate family or of the immediate family of any Principal Owner, will directly or indirectly (a) solicit for wellness or related services or products with any person who was a member or client of the Franchise within the two year period prior to such Transfer, termination or expiration; or (b) interfere with our relationship with any of our franchisees, vendors, suppliers or referral sources.
Source: Item 23 — Receipts (FDD pages 66–257)
What This Means (2025 FDD)
According to Degree Wellness's 2025 Franchise Disclosure Document, a franchisee acquires the right and undertakes the obligation to develop and operate a Degree Wellness Studio, as detailed in the Franchise Agreement. Degree Wellness grants franchises to those who meet their qualifications, allowing them to operate a Degree Wellness Studio in line with the established System within a specified geographic territory. This system encompasses the procedures, specifications, and techniques designated for operating a wellness business, including a studio model that offers franchised services and products.
In some instances, Degree Wellness may offer franchises to individuals or entities that may not be licensed to practice or provide health-related care but are willing to invest in and manage a Studio under the System. These are referred to as "Studio Management Businesses." The availability of such franchises depends on state laws, as some states do not permit non-licensed individuals to own or operate healthcare practices. In states where such ownership is permitted, a Studio Management Business Franchise may still be offered under certain circumstances.
During the term of the Franchise Agreement, franchisees must not engage in any business that offers products or services similar to those offered at Degree Wellness Studio franchises. This restriction extends to the franchisee, any Principal Owner, and their immediate family members. However, owning one percent or less of a publicly traded company is an exception to this rule. Franchisees are also prohibited from making negative or critical statements about Degree Wellness, its franchisees, or their respective businesses. This obligation extends both during the term of the agreement and after its termination or expiration.
Furthermore, franchisees are restricted from soliciting wellness services or products from anyone who was a member or client of the Franchise within two years prior to the agreement's transfer, termination, or expiration. They are also prohibited from interfering with Degree Wellness's relationships with its franchisees, vendors, suppliers, or referral sources. These obligations ensure the protection of Degree Wellness's business model, reputation, and relationships within the franchise network.