What is excluded from the definition of 'gross revenues' when calculating the Degree Wellness continuing franchise fee?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
You agree to pay us a continuing franchise fee ("Continuing Franchise Fee") equal to seven percent (7%) of the gross revenues (defined below) of the Franchise. The Continuing Franchise Fee will be payable monthly on the day of the month we specify based on the Franchise's gross revenues for the preceding month. The term "gross revenues" shall, for purposes of this Agreement, mean the total of all revenue and receipts derived from the operation of the Franchise, including all amounts received at or away from the site of the Franchise, or through the business the Franchise conducts (such as fees for the sale of any service or product, gift certificate sales, and revenue derived from products sales, whether in cash or by check, credit card, debit card, barter or exchange, or other credit transactions, without reserve or deduction for inability or failure to collect); and excludes only sales taxes collected from customers and paid to the appropriate taxing authority, and any customer refunds and credits the Franchise actually makes.
Source: Item 23 — Receipts (FDD pages 66–257)
What This Means (2025 FDD)
According to Degree Wellness's 2025 Franchise Disclosure Document, gross revenues are defined as the total of all revenue and receipts derived from the operation of the Franchise. This includes all amounts received at or away from the site of the Franchise, or through the business the Franchise conducts, such as fees for the sale of any service or product, gift certificate sales, and revenue derived from products sales, whether in cash or by check, credit card, debit card, barter or exchange, or other credit transactions, without reserve or deduction for inability or failure to collect.
However, the agreement specifically excludes certain items from the calculation of gross revenues for the purpose of determining the continuing franchise fee. These exclusions are limited to sales taxes collected from customers and paid to the appropriate taxing authority, and any customer refunds and credits the Franchise actually makes.
This definition is important for prospective franchisees as it directly impacts the amount of the continuing franchise fee they will be required to pay. By clearly defining what constitutes gross revenues and what is excluded, Degree Wellness aims to provide transparency and avoid potential disputes over fee calculations. Franchisees should carefully review this definition to understand how their revenue streams will be assessed for the purpose of calculating the continuing franchise fee.