Can Degree Wellness borrow from lenders to cover deficits in the advertising fund?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
We may spend in any fiscal year an amount greater or less than the total contributions to the Fund in that year. We may cause the Fund to borrow from us or other lenders to cover deficits of the Fund, or to invest any surplus for future use by the Fund. You authorize us to collect for remission to the Fund any advertising monies or credits offered by any supplier to you based upon purchases you make. We will prepare an annual, unaudited statement of monies collected and costs incurred by the Fund and will make it available to you on written request.
Source: Item 23 — Receipts (FDD pages 66–257)
What This Means (2025 FDD)
According to Degree Wellness's 2025 Franchise Disclosure Document, Degree Wellness has the authority to manage the advertising fund as they see fit. This fund is used to support marketing and promotional programs for Degree Wellness Studio franchises at the national, regional, or local level.
Degree Wellness has the discretion to spend more or less than the total contributions to the fund in any given fiscal year. To cover deficits, Degree Wellness may borrow from themselves or other lenders. Conversely, any surplus in the fund may be invested for future use.
This arrangement means that Degree Wellness franchisees are contributing to a fund that the franchisor has significant control over, including the ability to incur debt on its behalf. While this could allow for more strategic or aggressive advertising spending, it also carries the risk of the fund accumulating debt that franchisees are indirectly supporting through their contributions. Degree Wellness will provide an annual, unaudited statement of monies collected and costs incurred by the Fund and will make it available to you on written request.