How is the contribution amount determined for the Degree Wellness advertising cooperative?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
L of the System website in the manner that we may designate.
Local and Regional Advertising Cooperatives
We may, in our sole discretion, elect to form an advertising cooperative and/or advertising council for the benefit of the franchise system. If advertising cooperatives or councils are formed, we will retain the right to change, dissolve or merge any such cooperative or council, in our sole discretion. As of the date of this disclosure document we have not established any advertising cooperative or council, however, when applicable, the terms of the Franchise Agreement require you to participate in any such advertising cooperative or council as directed by us. The members of the Cooperative for any such area will consist of all Degree Wellness Studios whether operated by us, our affiliate, or by any of our affiliate's wholly-owned subsidiaries or by franchisees. The franchisees will administer the cooperative. If we require you to participate in an established cooperative advertising campaign for your market area, you minimum contribution will be $1,000 per month. The actual amount will be set by the cooperatives governing documents, of which we do not have a copy to provide to you. Each cooperative will establish their own governing documents and self-govern. If Franchisor-owned locations are a part of the advertising cooperative, then they will contribute at the same rate as franchisee-owned locations and have the same voting rights. Each franchisee in the same market will be required to be a member. Your $1,000 minimum monthly cooperative contribution will apply to the satisfaction of your local advertising requirement once the Studio is open at least 12 full months. Governing documents are not available for the franchisee's review. The contribution amount will be set by a majority vote of the members of the cooperative. A membership of the cooperative is determined by the numbers of locations a franchisee may have. For example if a franch
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 contribution amount for the advertising cooperative is determined by a majority vote of the members of the cooperative. The members consist of all Degree Wellness Studios, including those operated by the franchisor, its affiliates, or franchisees. If Degree Wellness requires participation in a cooperative advertising campaign, the minimum contribution is $1,000 per month, but the actual amount will be set by the cooperative's governing documents. These governing documents are not available for franchisee review. Franchisee-owned and franchisor-owned locations contribute at the same rate and have the same voting rights. Each franchisee in the same market is required to be a member. The number of memberships, and therefore votes, a franchisee has is determined by the number of locations they own within the cooperative. For example, a franchisee with three locations has three memberships and three votes. The $1,000 minimum monthly cooperative contribution applies to the local advertising requirement once the studio has been open for at least 12 full months.
This means that while Degree Wellness sets a minimum contribution, the franchisees themselves, through a majority vote, decide the actual amount required for the advertising cooperative. This gives franchisees a direct say in how advertising funds are spent in their market area. However, the franchisor retains the right to form, change, dissolve, or merge any advertising cooperative or council at its sole discretion.
Prospective franchisees should be aware that the governing documents of the advertising cooperative are not available for review, which means they cannot fully assess how the cooperative is run before joining. It is important to inquire with Degree Wellness about the typical contribution amounts set by cooperatives in other markets and how these funds are used to support local advertising efforts. Understanding the dynamics of the cooperative and its decision-making processes is crucial for franchisees to effectively plan their advertising and marketing strategies.