What general operating expenses can the Degree Wellness brand development fund be used for?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
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 will prepare an annual unaudited statement of monies collected and costs incurred by the Fund and will provide it to you upon written request. A franchisee may request an annual report of general category spending of the Fund. This report may be requested in writing and will be provided in the manner we determine no more than one time per year and only after March 1 for the prior year. There is no history of a prior fiscal year to disclose in this disclosure document.
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, the brand development fund can be used for specific general operating expenses related to the fund's administration and marketing programs. These include salaries, administrative costs, and overhead incurred in activities reasonably related to administering the fund and its marketing programs. This encompasses preparing advertising and marketing materials, as well as collecting and accounting for contributions to the fund.
Degree Wellness retains significant control over the fund's usage, including creative concepts, materials, endorsements, and media. The fund can cover costs associated with various advertising and marketing activities such as television, radio, magazine, billboard, newspaper, and internet programs. It also includes expenses for marketing research, website development and maintenance, search engine optimization, social media, and administering regional advertising programs. The fund can also be used to employ advertising agencies and vendors, develop online asset management tools, and provide marketing training programs and materials to Degree Wellness Studio franchises.
Franchisees should note that Degree Wellness has the discretion to determine the allocation of the fund and is not obligated to ensure that expenditures in any geographic area are proportionate to contributions from franchises in that area. Additionally, Degree Wellness assumes no direct liability to franchisees in connection with the fund's operation or the disbursement of monies. While the fund aims to enhance the recognition of the Degree Wellness brand, there is no guarantee that any individual franchise will directly benefit from the fund's activities in proportion to their contribution.
Prospective franchisees should carefully consider these factors and seek clarification from Degree Wellness regarding the specific allocation and usage of the brand development fund to understand how it aligns with their business goals and expectations. Understanding the fund's priorities and potential benefits is crucial for making an informed investment decision.