What was the average Net Operating Income for Degree Wellness studios?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
ational characteristics as a those being offered pursuant to this disclosure document and do not otherwise materially differ from what you would operate as a franchisee.
| Studio 1 | % of Rev. | Studio 3 | % of Rev. | Studio 4 | % of Rev. | Average | % of Rev. Above/Below | Median | |
|---|---|---|---|---|---|---|---|---|---|
| Gross Revenue | 181,459 | 100.0% | 137,586 | 100.0% | 156,307 | 100.0% | 158,451 | 100.0% 1/2 | 156,307 |
| Cost of Goods Sold | 19,269 | 10.6% | 12,047 | 8.8% | 16,452 | 10.5% | 15,922 | 10.0% 2/1 | 16,452 |
| Gross Profit | 162,190 | 89.4% | 125,539 | 91.2% | 139,855 | 89.5% | 142,528 | 90.0% 1/2 | |
| Expenses | |||||||||
| Advertising & Marketing | 8,234 | 4.5% | 8,308 | 6.0% | 12,293 | 7.9% | 9,612 | 6.1% 1/2 | 8,308 |
| Insurance | 1,382 | 0.8% | 1,094 | 0.8% | 1,731 | 1.1% | 1,402 | 0.9% 1/2 | 1,382 |
| Office Expenses | 2,649 | 1.5% | 3,248 | 2.4% | 2,866 | 1.8% | 2,921 | 1.8% 1/2 | 2,866 |
| Payroll Expenses | 27,191 | 15.0% | 25,280 | 18.4% | 29,034 | 18.6% | 27,169 | 17.1% 2/1 | 27,191 |
| Rent & Lease | 13,078 | 7.2% | 13,832 | 10.1% | 23,276 | 14.9% | 16,728 | 10.6% 1/2 | 13,832 |
| Repairs & Maintenance | 679 | 0.4% | 329 | 0.2% | -- | 0.0% | 336 | 0.2% 1/2 | 329 |
| Taxes | -- | 0.0% | -- | 0.0% | -- | 0.0% | -- | 0.0% | -- |
| Utilities | 3,866 | 2.1% | 2,920 | 2.1% | 6,188 | 4.0% | 4,325 | 2.7% 1/2 | 3,866 |
| Total Expenses | 57,079 | 31.5% | 55,011 | 40.0% | 75,389 | 48.2% | 62,493 | 39.4% 1/2 | 57,079 |
| Net Operating Income | 105,112 | 57.9% | 70,528 | 51.3% | 64,466 | 41.2% | 80,035 | 50.5% 1/2 | 70,528 |
| Estimated Fees | |||||||||
| Royalties | 12,702 | 7.0% | 9,631 | 7.0% | 10,941 | 7.0% | 11,092 | 7.0% 1/2 | 10,941 |
| Brand Fund | 1,815 | 1.0% | 1,376 | 1.0% | 1,563 | 1.0% | 1,585 | 1.0% 1/2 | 1,563 |
| Total Estimated Fees | 14,517 | 8.0% | 11,007 | 8.0% | 12,505 | 8.0% | 12,676 | 8.0% 1/2 | 12,505 |
| Net Income Adjusted, OO | 90,595 | 49.9% | 59,521 | 43.3% | 51,962 | 33.2% | 67,359 | 42.5% 1/2 | 59,521 |
| Studio Manager Payroll Expenses | 17,295 | 9.5% | 12,672 | 9.2% | 14,441 | 9.2% | 8,882 | 5.6% 3/0 | 14,441 |
| Net Income Adjusted, Investor | 73,300 | 40.4% | 46,849 | 34.1% | 37,520 | 24.0% | 58,477 | 36.9% 1/2 | 46,849 |
Explanatory Notes to Tables 1 and 2
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- Gross Sales means all gross receipts, less tips and sales tax and represents the amount upon which will base your Royalty Fee, Local Advertising Requirement and Fund Contribution under your Franchise Agreement with us.
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- COGS means all variable cost inputs to facilitate customer sales, including equipmentrelated consumables, medical supplies and other usage-based costs.
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- Gross Profit means Gross Sales less COGS.
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- Advertising and Marketing means the actual local marketing expenditures of the location. Your requirements will include $12,000 of Presale Marketing and an annual Local Marketing Requirement of $2500 per month ($30,000 per year).
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- Insurance means the actual amounts expended on insurance in the operation of the Studio.
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- Office Expenses means general cleaning supplies/services, office supplies, postage, and software.
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- Payroll Expenses means all hourly and salaried labor excluding general managers, including based wages, payroll taxes, and benefits. This definition excludes the cost of multi-unit managers.
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- Rent and Lease means base rent and all related NNN (triple net) costs, including common area maintenance, insurance, and tax-related obligations under the Lease.
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- Repairs and Maintenance means all standard maintenance items, including HVAC maintenance, electrical maintenance, necessary repair items, and any equipment repairs.
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- Taxes means all taxes, including property taxes, incurred in the operation of the Studio.
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- Utilities means the following utility expenses electric, water, power, internet and phone.
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Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 60–63)
What This Means (2025 FDD)
According to Degree Wellness's 2025 Franchise Disclosure Document, the average Net Operating Income (NOI) can be derived from the financial performance representations of affiliate-owned locations. Chart 1, which covers the calendar year 2024, shows that Studio 1 had a Net Operating Income of $403,679 and Studio 2 had an NOI of $172,915. The average Net Operating Income for these two studios was $288,297.
Chart 2, which covers the first quarter of 2025, provides data for three studios (Studio 1, Studio 3, and Studio 4). The average Net Operating Income for these studios was $80,035. It's important to note that Studio 2 was excluded from this chart because it was in the process of being relocated and winding down operations during that period. Therefore, the average NOI from Chart 2 may not be representative of a fully operational studio.
It is important to consider the context of these figures. The FDD notes that the disclosed affiliate locations are in Jacksonville, Florida, where the brand has established goodwill. Additionally, Studio 1 and Studio 2 were already open for some time at the start of 2024, meaning they may not have incurred the same startup costs as a new franchise. The FDD also explicitly states, "Your individual results may vary. There is no assurance that you will sell as much."
Prospective franchisees should carefully review the complete Item 19 in the FDD, understand the assumptions and definitions used in calculating NOI, and consider how these factors might affect their own studio's financial performance. It is advisable to conduct thorough due diligence and possibly consult with a financial advisor to assess the potential profitability of a Degree Wellness franchise in their specific market.