How is the 'Estimated Royalties' calculated for a Degree Wellness franchise?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
/0 | 14,441 | | Net Income Adjusted, Investor | 73,300 | 40.4% | 46,849 | 34.1% | 37,520 | 24.0% | 58,477 | 36.9% 1/2 | 46,849 |
Explanatory Notes to Tables 1 and 2
-
- Gross Sales means all gross receipts, less tips and sales tax and represents the amount upon which will base your Royalty Fee, Local Advertising Requirement and Fund Contribution under your Franchise Agreement with us.
-
- COGS means all variable cost inputs to facilitate customer sales, including equipmentrelated consumables, medical supplies and other usage-based costs.
-
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 Royalties' are calculated as 7% of Gross Sales. Gross Sales are defined as all gross receipts, less tips and sales tax. This is the amount upon which Degree Wellness will base the Royalty Fee, Local Advertising Requirement and Fund Contribution under the Franchise Agreement.
For a prospective franchisee, this means that 7% of their revenue (after deducting tips and sales tax) will be paid to Degree Wellness as a royalty fee. This fee is a standard component of most franchise agreements and compensates the franchisor for the use of their brand, systems, and ongoing support. The royalty payment is ongoing for the term of the franchise agreement.
It is important for a potential Degree Wellness franchisee to understand how 'Gross Sales' is defined, as this figure directly impacts the royalty payments. Franchisees should also factor this 7% royalty fee into their financial projections to accurately assess the profitability of the franchise. Additionally, franchisees should be aware of the Local Advertising Requirement and Brand Fund Contribution, as these are also calculated based on Gross Sales.