Why can't Degree Wellness include all the financial statements required by the FTC Franchise Rule?

According to Degree Wellness's 2025 Franchise Disclosure Document, the company has not been in business long enough to fulfill the FTC's requirements for financial statement disclosures. Specifically, Degree Wellness has not been in business for three years or more.

This is a common situation for newer franchises. The FTC requires a certain history of financial performance to be documented in the FDD to give prospective franchisees a clearer picture of the franchisor's financial health. Because Degree Wellness was formed in February 2024, it does not yet have the three years of operating history needed to provide a complete set of financial statements.

For a potential Degree Wellness franchisee, this means there is less historical financial data available to review. While the FDD does include audited balance sheets as of December 31, 2024, and related statements, the limited operating history may make it more difficult to assess the financial stability and performance of the franchise system. It would be prudent for a prospective franchisee to carefully review the available financial statements, ask detailed questions of the franchisor regarding their financial projections and business plan, and possibly seek advice from a financial advisor.

It's important to note that while Degree Wellness itself has a limited operating history, its predecessor company, Degree Wellness, Inc., was formed in 2018. However, Degree LLC purchased substantially all of the assets of Degree Inc. on October 15, 2020, so the financial history of Degree Wellness, Inc. is not directly applicable to Degree Wellness Franchise, LLC. Therefore, the financial statements only reflect the operations of Degree Wellness Franchise, LLC since its formation.