For Degree Wellness, is the Management Fee considered payment for patient referrals?

According to Degree Wellness's 2025 Franchise Disclosure Document, the Management Fee is explicitly not intended to be, and should not be interpreted as, payment for patient referrals. This applies whether the referrals are from Management Company to the Licensed Provider or vice versa. This clarification is important for franchisees to understand, as it ensures compliance with healthcare regulations regarding kickbacks or fee-splitting for patient referrals, which are often illegal.

This provision protects both Degree Wellness and its franchisees from potential legal issues related to improper referral practices. The Management Fee covers the Management Company's services and the licenses granted to the Licensed Provider, as detailed in Section 4 of the agreement. These services include various administrative and management functions necessary for operating the studio, such as acquiring the site, managing operational workflow, handling office management, and overseeing staff.

By explicitly stating that the Management Fee is not for patient referrals, Degree Wellness aims to maintain transparency and ethical business practices within its franchise system. Prospective franchisees should be aware of this distinction and ensure their operations align with all applicable healthcare laws and regulations. This also means that franchisees cannot expect direct patient referrals as a guaranteed return on their Management Fee; instead, they should focus on building their patient base through compliant marketing and service delivery strategies.