Is worker's compensation and employer's liability insurance required for a Degree Wellness franchise?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
r right or remedy we may have, you agree to pay the employee's current or former employer twice the employee's annual salary, plus all costs and attorneys' fees incurred as a result of the violation. This amount is set at twice the employee's annual salary because it is a reasonable estimation of the damages that would occur from such a breach, and it will almost certainly be impossible to calculate precisely the actual damages from such a breach.)
10.8 Insurance
a. Before you open the Franchise and during any Term of this Agreement, you must maintain in force, under policies of insurance issued by carriers in good standing in the state where your Studio is located: (1) comprehensive commercial general liability and motor vehicle liability insurance against claims for bodily and personal injury, death and property damage caused by or occurring in conjunction with the operation of the Franchise or otherwise in conjunction with your conduct of the Franchise business pursuant to this Agreement, under one or more policies of insurance containing minimum liability coverage of not less than $1,000,000 per occurrence and $3,000,000 in the aggregate; (2) worker's compensation and employer's liability insurance as required by law, with limits equal to or in excess of those required by
statute; (3) professional liability (malpractice) insurance, for each doctor practicing in your Franchise business, having limits of not less than $1,000,000 per occurrence and $3,000,000 in the aggregate; and (4) any other insurance required by applicable law, rule, regulation, ordinance or licensing requirements. We may periodically increase or decrease the amounts of coverage required under these insurance policies, and/or require different or additional kinds of insurance, including excess liability insurance, to reflect inflation, identification of new risks, changes in law or standards of liability, higher damage awa
Source: Item 23 — Receipts (FDD pages 66–257)
What This Means (2025 FDD)
According to Degree Wellness's 2025 Franchise Disclosure Document, franchisees are required to maintain worker's compensation and employer's liability insurance. The specific amount of coverage must adhere to the minimums mandated by the law in the state where the Degree Wellness studio is located.
In addition to worker's compensation and employer's liability insurance, Degree Wellness requires franchisees to maintain comprehensive commercial general liability and motor vehicle liability insurance with minimum liability coverage of $1,000,000 per occurrence and $3,000,000 in the aggregate. Franchisees must also carry professional liability (malpractice) insurance for each doctor practicing in their franchise business, with limits of not less than $1,000,000 per occurrence and $3,000,000 in the aggregate. Furthermore, franchisees must obtain any other insurance required by applicable law, rule, regulation, ordinance, or licensing requirements.
Degree Wellness retains the right to modify the required coverage amounts or types of insurance policies to reflect factors such as inflation, new risks, changes in laws, or higher damage awards. While Degree Wellness mandates certain insurance coverage, they also recommend franchisees obtain additional coverage such as property damage, business interruption, employment practices, cyber liability, and electronic data loss insurance. Compliance with state minimum insurance requirements does not relieve the franchisee from meeting the contractual insurance obligations outlined in the Franchise Agreement.
It is important for prospective Degree Wellness franchisees to consult with their own insurance agents, brokers, and attorneys to determine the types and levels of insurance protection they may need or desire, beyond the minimums specified by Degree Wellness. Franchisees remain responsible for all losses, damages, and contractual liabilities to third parties arising from the operation of the franchise, regardless of the existence of the required insurance coverage.