Can the Degree Wellness brand development fund invest surplus funds?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
We may spend in any fiscal year an amount greater or less than the aggregate contributions to the Fund in that year, and the Fund may borrow from us or other lenders to cover the Fund's deficits or invest any surplus for future use by the Fund. We will prepare an annual unaudited statement of monies collected and costs incurred by the Fund and will provide it to you upon written request. A franchisee may request an annual report of general category spending of the Fund. This report may be requested in writing and will be provided in the manner we determine no more than one time per year and only after March 1 for the prior year.
Source: Item 11 — Franchisor's Assistance, Advertising, Computer Systems, and Training (FDD pages 32–42)
What This Means (2025 FDD)
According to Degree Wellness's 2025 Franchise Disclosure Document, the brand development fund has the ability to invest surplus funds. The FDD states that Degree Wellness may spend more or less than the contributions to the fund in a given year. To cover deficits, the fund may borrow from Degree Wellness or other lenders. Conversely, any surplus may be invested for the fund's future use.
This is a common practice in franchising, allowing the fund to grow and have more resources available for marketing and advertising initiatives. However, it also means that the amount spent on marketing in any given year can fluctuate, which could impact the consistency of brand promotion.
As a Degree Wellness franchisee, it's important to monitor the fund's financial statements to understand how contributions are being managed and whether surpluses are being invested wisely. The FDD indicates that Degree Wellness will provide an annual unaudited statement of monies collected and costs incurred by the Fund upon written request. A franchisee may request an annual report of general category spending of the Fund. This report may be requested in writing and will be provided in the manner we determine no more than one time per year and only after March 1 for the prior year.