If an underpayment is discovered during an audit of a Degree Wellness franchise, what is the franchisee obligated to pay?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
If at any time we determine that you have under-reported the Franchise's gross revenues or underpaid any Continuing Franchise Fee or Fund contribution due us under this Agreement, then we will be authorized to initiate immediately a debit to the Account in the appropriate amount, plus applicable interest, in accordance with the foregoing procedure.
Source: Item 23 — Receipts (FDD pages 66–257)
What This Means (2025 FDD)
According to Degree Wellness's 2025 Franchise Disclosure Document, if a franchisee has under-reported gross revenues or underpaid any Continuing Franchise Fee or Fund contribution, Degree Wellness is authorized to immediately debit the franchisee's account for the underpaid amount, plus applicable interest.
This means that Degree Wellness has the right to take the necessary funds directly from the franchisee's account to cover the underpayment. Additionally, the franchisee will be responsible for paying interest on the underpaid amount. This policy incentivizes accurate reporting and timely payments from franchisees.
It is important for prospective Degree Wellness franchisees to understand this policy and ensure they have sufficient funds in their account to cover any potential underpayments discovered during an audit, as well as the associated interest charges. Franchisees should maintain accurate records of their gross revenues and fee payments to avoid such situations.