What happens if the Degree Wellness advertising fund has a surplus?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
We may spend in any fiscal year an amount greater or less than the total contributions to the Fund in that year. We may cause the Fund to borrow from us or other lenders to cover deficits of the Fund, or to invest any surplus for future use by the Fund.
Source: Item 23 — Receipts (FDD pages 66–257)
What This Means (2025 FDD)
According to Degree Wellness's 2025 Franchise Disclosure Document, any surplus in the advertising fund may be invested for future use by the fund. This means that if the contributions to the fund exceed the expenses in a given period, Degree Wellness has the option to save the excess funds for later advertising and marketing initiatives. This provides Degree Wellness with financial flexibility to handle advertising needs and opportunities as they arise.
This approach is fairly common in franchising, as advertising funds can fluctuate based on promotional schedules and market conditions. By allowing Degree Wellness to invest surpluses, the fund can potentially grow over time, providing more resources for future advertising campaigns. This could benefit franchisees by increasing brand awareness and attracting more customers to their studios.
However, it's important for prospective franchisees to understand that Degree Wellness has sole discretion over how the advertising fund is managed and spent. While surpluses may be invested, there's no guarantee that these investments will directly benefit individual franchisees or specific geographic areas. Franchisees should carefully review the FDD and ask Degree Wellness about their specific plans for managing and utilizing the advertising fund to ensure they are comfortable with the franchisor's approach.