Under the Degree Wellness franchise agreement, who is responsible for providing workers' compensation, unemployment compensation, and other employee benefits to staffers and support personnel?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
In the performance of this Agreement, it is mutually understood and agreed that Staffer and Support Personnel (as defined in Exhibit A) are at all times acting and performing as independent contractors with, and not as employees, joint venturers or lessees of Group. Staffer and Support Personnel shall have no claim under this Agreement or otherwise against Group for workers' compensation, unemployment compensation, sick leave, vacation pay, pension or retirement benefits, Social Security benefits or any other employee benefits, all of which shall be the sole responsibility of Staffer. Group shall not withhold on behalf of Staffer or any Support Personnel any sums for income tax, unemployment insurance, Social Security or otherwise pursuant to any law or requirement of any government agency, and all such withholding, if any is required, shall be the sole responsibility of Staffer. Staffer and all Support Personnel shall indemnify and hold harmless Group from any and all loss or liability, if any, arising out of or with respect to any of the foregoing benefits or withholding requirements.
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 Staffer (which would be the franchisee) is responsible for providing workers' compensation, unemployment compensation, and other employee benefits to staffers and support personnel. The FDD clarifies that Staffer and Support Personnel are independent contractors and not employees of Group (Degree Wellness). Therefore, Degree Wellness is not liable for providing any employee benefits to the Staffer or Support Personnel.
Specifically, the franchisee is responsible for workers' compensation, unemployment compensation, sick leave, vacation pay, pension or retirement benefits, Social Security benefits, or any other employee benefits. The franchisee is also responsible for any required income tax, unemployment insurance, or Social Security withholding. The franchisee must indemnify and hold Degree Wellness harmless from any loss or liability related to these benefits or withholding requirements.
This arrangement is typical in franchising, where franchisees are considered independent business owners. It is the franchisee's responsibility to manage their employees and comply with all applicable labor laws. This includes providing legally mandated benefits and insurance, as well as handling all tax-related obligations for their staff. Degree Wellness maintains no responsibility for these aspects of the franchisee's business operations.