Does Degree Wellness establish, maintain, and administer a fund?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
We will establish, maintain, and administer the Fund.
As available, we will provide you with digital copies of our marketing materials via our intranet. (Franchise Agreement – Section 11.1).
We currently administer a brand development fund (the "Fund") for the benefit of the entire System of Studio. We use the Fund to meet certain costs related to maintaining, administering, directing, conducting and preparing advertising, marketing, public relations, and/or promotional programs and materials, and any other activities which we believe will enhance the image of the System. We require all Degree Wellness Studios to contribute 1% of their gross revenues to the Fund. All Degree Wellness Studio will be required to contribute to the Fund on the same basis as you, respectively, unless prohibited by law. Your required Fund contribution may be increased to
an amount equal to up to two percent (2%) of the gross revenues generated by your Studio upon 60 days' prior written notice of such an increase via the Manuals or otherwise in writing. Other franchised and affiliate-owned Studio will contribute to the Fund in the same amount and manner as franchised Studio subject only to limitations under applicable law.
The Fund will be accounted for separately from our other funds and will not be used to pay any of our general operating expenses, except for salaries, administrative costs, and overhead that we incur in activities reasonably related to the administration of the Fund and its marketing programs, including preparing advertising and marketing materials, and collecting and accounting for contributions to the Fund. 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 may suspend contributions to, and the operations of, the Fund for any period we deem appropriate, and may terminate the Fund upon 30 days' written notice to you. All unspent monies held by the Fund on the date of termination will be distributed to us, our affiliates, and you and our other franchisees in proportion to each party's respective contributions to the Fund during the preceding 12-month period. We may reinstate the Fund if terminated upon the same terms and conditions set forth in the Franchise Agreement upon 30 days' advance written notice to you.
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, Degree Wellness does establish, maintain, and administer a brand development fund (the "Fund") for the benefit of the entire system of studios. Degree Wellness uses the Fund to meet certain costs related to maintaining, administering, directing, conducting, and preparing advertising, marketing, public relations, and/or promotional programs and materials, and any other activities which Degree Wellness believes will enhance the image of the system. All Degree Wellness studios are required to contribute 1% of their gross revenues to the Fund.
The Fund will be accounted for separately from Degree Wellness's other funds and will not be used to pay any of their general operating expenses, except for salaries, administrative costs, and overhead that they incur in activities reasonably related to the administration of the Fund and its marketing programs, including preparing advertising and marketing materials, and collecting and accounting for contributions to the Fund. Degree Wellness 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 them or other lenders to cover the Fund's deficits or invest any surplus for future use by the Fund.
Degree Wellness may suspend contributions to, and the operations of, the Fund for any period they deem appropriate, and may terminate the Fund upon 30 days' written notice to franchisees. All unspent monies held by the Fund on the date of termination will be distributed to Degree Wellness, their affiliates, and franchisees in proportion to each party's respective contributions to the Fund during the preceding 12-month period. Degree Wellness may reinstate the Fund if terminated upon the same terms and conditions set forth in the Franchise Agreement upon 30 days' advance written notice.