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What was the median Net Income Adjusted for investors across all Degree Wellness studios?

Degree_Wellness Franchise · 2025 FDD

Answer from 2025 FDD Document

ational characteristics as a those being offered pursuant to this disclosure document and do not otherwise materially differ from what you would operate as a franchisee.

Studio 1 % of Rev. Studio 3 % of Rev. Studio 4 % of Rev. Average % of Rev. Above/Below Median
Gross Revenue 181,459 100.0% 137,586 100.0% 156,307 100.0% 158,451 100.0% 1/2 156,307
Cost of Goods Sold 19,269 10.6% 12,047 8.8% 16,452 10.5% 15,922 10.0% 2/1 16,452
Gross Profit 162,190 89.4% 125,539 91.2% 139,855 89.5% 142,528 90.0% 1/2
Expenses
Advertising & Marketing 8,234 4.5% 8,308 6.0% 12,293 7.9% 9,612 6.1% 1/2 8,308
Insurance 1,382 0.8% 1,094 0.8% 1,731 1.1% 1,402 0.9% 1/2 1,382
Office Expenses 2,649 1.5% 3,248 2.4% 2,866 1.8% 2,921 1.8% 1/2 2,866
Payroll Expenses 27,191 15.0% 25,280 18.4% 29,034 18.6% 27,169 17.1% 2/1 27,191
Rent & Lease 13,078 7.2% 13,832 10.1% 23,276 14.9% 16,728 10.6% 1/2 13,832
Repairs & Maintenance 679 0.4% 329 0.2% -- 0.0% 336 0.2% 1/2 329
Taxes -- 0.0% -- 0.0% -- 0.0% -- 0.0% --
Utilities 3,866 2.1% 2,920 2.1% 6,188 4.0% 4,325 2.7% 1/2 3,866
Total Expenses 57,079 31.5% 55,011 40.0% 75,389 48.2% 62,493 39.4% 1/2 57,079
Net Operating Income 105,112 57.9% 70,528 51.3% 64,466 41.2% 80,035 50.5% 1/2 70,528
Estimated Fees
Royalties 12,702 7.0% 9,631 7.0% 10,941 7.0% 11,092 7.0% 1/2 10,941
Brand Fund 1,815 1.0% 1,376 1.0% 1,563 1.0% 1,585 1.0% 1/2 1,563
Total Estimated Fees 14,517 8.0% 11,007 8.0% 12,505 8.0% 12,676 8.0% 1/2 12,505
Net Income Adjusted, OO 90,595 49.9% 59,521 43.3% 51,962 33.2% 67,359 42.5% 1/2 59,521
Studio Manager Payroll Expenses 17,295 9.5% 12,672 9.2% 14,441 9.2% 8,882 5.6% 3/0 14,441
Net Income Adjusted, Investor 73,300 40.4% 46,849 34.1% 37,520 24.0% 58,477 36.9% 1/2 46,849

Explanatory Notes to Tables 1 and 2

    1. Gross Sales means all gross receipts, less tips and sales tax and represents the amount upon which will base your Royalty Fee, Local Advertising Requirement and Fund Contribution under your Franchise Agreement with us.
    1. COGS means all variable cost inputs to facilitate customer sales, including equipmentrelated consumables, medical supplies and other usage-based costs.
    1. Gross Profit means Gross Sales less COGS.
    1. Advertising and Marketing means the actual local marketing expenditures of the location. Your requirements will include $12,000 of Presale Marketing and an annual Local Marketing Requirement of $2500 per month ($30,000 per year).
    1. Insurance means the actual amounts expended on insurance in the operation of the Studio.
    1. Office Expenses means general cleaning supplies/services, office supplies, postage, and software.
    1. Payroll Expenses means all hourly and salaried labor excluding general managers, including based wages, payroll taxes, and benefits. This definition excludes the cost of multi-unit managers.
    1. Rent and Lease means base rent and all related NNN (triple net) costs, including common area maintenance, insurance, and tax-related obligations under the Lease.
    1. Repairs and Maintenance means all standard maintenance items, including HVAC maintenance, electrical maintenance, necessary repair items, and any equipment repairs.
    1. Taxes means all taxes, including property taxes, incurred in the operation of the Studio.
    1. Utilities means the following utility expenses electric, water, power, internet and phone.

Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 60–63)

What This Means (2025 FDD)

According to Degree Wellness's 2025 Franchise Disclosure Document, the median Net Income Adjusted for investors varies depending on the studio and the period analyzed. For the first quarter of 2025, based on the performance of three affiliate-owned locations, the median Net Income Adjusted for investors was $46,849. This figure is derived after deducting the costs associated with a general manager from the Net Income Adjusted for an owner-operator, representing the income potential for an investor franchisee.

For the calendar year 2024, the median Net Income Adjusted for investors, calculated from two studios, was $83,311. It's important to note that Studio 2, used in this calculation, did not offer contrast therapy or cold plunge and lacked showers, potentially affecting its financial performance. The FDD indicates that Studio 2 is being relocated to offer these services, suggesting that the figures from this studio may not be fully representative of the Degree Wellness concept's potential.

It is important to consider the characteristics of the affiliate locations when interpreting this data. The disclosed affiliate locations are situated in Jacksonville, Florida, or the surrounding area, where the Degree Wellness brand has established goodwill over several years. Additionally, Studio 1 and Studio 2 were already operational at the start of 2024, meaning they did not incur the initial startup costs typically associated with a new studio. These factors could influence the financial performance and may not be directly transferable to a new franchise location. Prospective franchisees should carefully review these figures in light of their own market conditions and anticipated operating costs.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.
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