What fees and charges are the Degree Wellness Licensed Provider responsible for paying?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
ate or cause to be created any lien or encumbrance on the Premises, the Marks, the System, or any other licensed item identified in this Section 4.
5. Fees and Other Charges for Management and Administrative Services.
- 5.1 In consideration for Management Company's performance of the Management Company Services and the grant of the licenses and sub-license set forth in Section 4, Licensed Provider hereby agrees to pay Management Company a management fee (herein called the "Management Fee"), which shall be the amount equal to the Gross Revenues of the Studio Management Business remaining after subtracting costs associated with Licensed Provider's salary and fringe benefits (and, if applicable, the Studio's employees' salary and wages and fringe benefits) as approved by Management Company, the Studio's payroll taxes and other withholding items, and any other Studio operating costs incurred by the Studio in accordance with this Agreement.
- (a) As used herein "Gross Revenues" shall mean the total of all revenue and receipts derived from the operation of the Studio, including all amounts received at or away from the site of the Studio or through the business the Studio conducts (such as fees for Studio Services, fees for the sale of any other services, gift certificate sales, and revenue derived from products sales, whether paid in cash or by check, credit card, or debit card, or other credit transactions); and excludes only sales taxes collected from patients and paid to the appropriate taxing authority, and any patient refunds and credits the Studio actually makes.
- 5.2 The Management Fee shall be paid to Management Company from the money transferred each day from Licensed Provider's Account into Management Company's operating account pursuant to Section 3.1(c).
- 5.3 The Management Fee, or any other fees due and payable under this Agreement, are not intended to be, and shall not be interpreted to be, payment for the referral of patients or recommendation of a referral of patients from Management Company to Licensed Provider or from Licensed Provider to Management Company.
6. Representations and Warranties.
- 6.1 Licensed Provider hereby makes the following representations and warranties:
- (a) Licensed Provider (or, if Licensed Provider is an entity, all owners, members, or individuals employed of/by Licensed Provider who will be providing the Studio Services under this Agreement) is not a party to any agreement or instrument that would prevent Licensed Provider from entering into or performing Licensed Provider's duties in any way under this Agreement. Licensed Provider and/or its authorized employees are duly licensed and in good
standing to provide the Studio Services in the state in which the Premises is located, and will remain licensed and in good standing at all times during the Agreement Term;
- (b) If Licensed Provider is an entity, this Agreement has been authorized by all necessary corporate action of Licensed Provider, and is a valid and binding agreement of Licensed Provider enforceable in accordance with its terms, and the individual signing on behalf of Licensed Provider is duly authorized to enter into and executed this Agreement;
Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 63–66)
What This Means (2025 FDD)
According to Degree Wellness's 2025 Franchise Disclosure Document, the Licensed Provider is responsible for a Management Fee. This fee is calculated as the Gross Revenues of the Studio Management Business, less the costs associated with the Licensed Provider's salary and fringe benefits (and, if applicable, the Studio's employees' salary and wages and fringe benefits) as approved by Management Company, the Studio's payroll taxes and other withholding items, and any other Studio operating costs incurred by the Studio in accordance with this Agreement. Gross Revenues include all revenue and receipts derived from the operation of the Studio, excluding sales taxes collected from patients and paid to the appropriate taxing authority, and any patient refunds and credits the Studio actually makes. The Management Fee is paid to Management Company from the money transferred each day from Licensed Provider's Account into Management Company's operating account.
Additionally, the Licensed Provider is responsible for maintaining timely payments of all income taxes due to the Internal Revenue Service and all other government agencies. The Licensed Provider is also responsible for fees related to federal, state, and local sales, payroll, and business tax returns of the Studio Management Business and Studio/Licensed Provider, pursuant to Section 3.1(e).
The Licensed Provider is also responsible for obtaining and maintaining malpractice insurance and other necessary insurance coverages, including the payment of applicable premiums and deductibles. The commercial general liability insurance policy must name Management Company, Degree Wellness and their respective owners, directors, employees, agents, and affiliates, as an additional insured on a primary and noncontributory basis. The malpractice policy for each doctor providing the Licensed Provider Services and/or working at the Studio must be endorsed, to the fullest extent possible, to name Management Company, Degree Wellness and their respective owners, directors, employees, agents, and affiliates, as an additional insured as well.