Are multi-unit manager costs included in the 'Payroll Expenses' definition for a Degree Wellness franchise?

According to Degree Wellness's 2025 Franchise Disclosure Document, the definition of 'Payroll Expenses' specifically excludes the costs associated with multi-unit managers. The FDD clarifies that 'Payroll Expenses' includes all hourly and salaried labor excluding general managers, including based wages, payroll taxes, and benefits.

For a prospective Degree Wellness franchisee, this means that the financial performance representations provided in Item 19, particularly those related to 'Payroll Expenses,' do not account for the costs of multi-unit managers. If a franchisee intends to operate multiple units and employ a multi-unit manager, they must factor in these costs separately when assessing the potential profitability of their franchise.

This exclusion is important for financial planning. Franchisees should carefully consider the additional expenses related to managing multiple units, as these costs are not reflected in the provided financial performance data. It is common for franchisors to exclude certain high-level management costs to provide a clearer picture of unit-level economics, but franchisees must account for their specific operational structure when projecting expenses.

Degree Wellness also excludes general manager costs from the 'Net Income Adjusted, OO' calculation, which is intended to show income if the franchisee was an owner-operator. Similarly, the 'Net Income Adjusted, Investor' deducts general manager costs to show income if the franchisee was an investor. This distinction highlights the importance of understanding which management costs are included or excluded in the financial representations.