How is the 'Estimated Brand Fund Contribution' calculated for a Degree Wellness franchise?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Estimated Brand Fund Contribution (Calculated at 1% of Adjusted Gross Sales) means the calculated estimated Brand Fund expenditures a location would have been required to pay had it been a franchise operating pursuant to this Franchise Disclosure Document.
Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 60–63)
What This Means (2025 FDD)
According to Degree Wellness's 2025 Franchise Disclosure Document, the 'Estimated Brand Fund Contribution' is calculated as 1% of Adjusted Gross Sales. This means that for every dollar of Adjusted Gross Sales a Degree Wellness franchise generates, one cent is allocated towards the Brand Fund.
The Brand Fund is used by Degree Wellness for marketing and promotional activities that benefit the entire franchise system. These activities can include national advertising campaigns, website development, and other initiatives designed to increase brand awareness and attract customers to Degree Wellness locations.
As an example, in 2024, Studio 1 had gross revenue of $738,070, resulting in a Brand Fund contribution of $7,381, which is 1.0% of the gross revenue. Studio 2 had gross revenue of $482,725, leading to a Brand Fund contribution of $4,827, also 1.0% of gross revenue. The average Brand Fund contribution for these studios was $6,104, representing 1.0% of the average gross revenue of $610,397. For the first quarter of 2025, Studio 1 had gross revenue of $181,459, resulting in a Brand Fund contribution of $1,815, which is 1.0% of the gross revenue. Studio 3 had gross revenue of $137,586, leading to a Brand Fund contribution of $1,376, also 1.0% of gross revenue. Studio 4 had gross revenue of $156,307, leading to a Brand Fund contribution of $1,563, also 1.0% of gross revenue. The average Brand Fund contribution for these studios was $1,585, representing 1.0% of the average gross revenue of $158,451.
It is important for prospective franchisees to understand that the Brand Fund contribution is an ongoing expense that will impact their profitability. While the Brand Fund can help to increase brand awareness and attract customers, franchisees should carefully consider the cost of the contribution and how it will affect their bottom line.