What is the net income adjusted for an investor in Studio 2 of Degree Wellness?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
| Studio 1 | % of Rev. | Studio 2 | % of Rev. | Average/Median | % of Rev. | |
|---|---|---|---|---|---|---|
| Gross Revenue | 738,070 | 100.0% | 482,725 | 100.0% | 610,397 | 100.0% |
| Cost of Goods Sold | 66,837 | 9.1% | 43,044 | 8.9% | 54,940 | 9.0% |
| Gross Profit | 671,233 | 90.9% | 439,682 | 91.1% | 555,457 | 91.0% |
| Expenses | ||||||
| Advertising & Marketing | 31,900 | 4.3% | 51,106 | 10.6% | 41,503 | 6.8% |
| Insurance | 5,275 | 0.7% | 3,412 | 0.7% | 4,343 | 0.7% |
| Office Expenses | 10,058 | 1.4% | 10,305 | 2.1% | 10,182 | 1.7% |
| Payroll Expenses | 137,648 | 18.6% | 93,674 | 19.4% | 115,661 | 18.9% |
| Rent & Lease | 56,401 | 7.6% | 98,476 | 20.4% | 77,439 | 12.7% |
| Repairs & Maintenance | 4,796 | 0.6% | 4,071 | 0.8% | 4,434 | 0.7% |
| Taxes | 4,446 | 0.6% | 2,932 | 0.6% | 3,689 | 0.6% |
| Utilities | 17,030 | 2.3% | 2,791 | 0.6% | 9,910 | 1.6% |
| Total Expenses | 267,554 | 36.3% | 266,767 | 55.3% | 267,160 | 43.8% |
| Net Operating Income | 403,679 | 54.7% | 172,915 | 35.8% | 288,297 | 47.2% |
| Estimated Fees | ||||||
| Royalties | 51,665 | 7.0% | 33,791 | 7.0% | 42,728 | 7.0% |
| Brand Fund | 7,381 | 1.0% | 4,827 | 1.0% | 6,104 | 1.0% |
| Total Estimated Fees | 59,046 | 8.0% | 38,618 | 8.0% | 48,832 | 8.0% |
| Net Income Adjusted, OO | 344,633 | 46.7% | 134,297 | 27.8% | 239,465 | 39.2% |
| Studio Manager Payroll Expenses | 61,096 | 8.3% | 50,986 | 10.6% | 56,041 | 9.2% |
| Net Income Adjusted, Investor | 283,537 | 38.4% | 83,311 | 17.3% | 183,424 | 30.0% |
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 Net Income Adjusted for an investor in Studio 2 is $83,311, representing 17.3% of revenue. This figure is calculated by subtracting studio manager payroll expenses from the Net Income Adjusted for an owner-operator. The Net Income Adjusted for an owner-operator is Gross Profit less all expenses, excluding general manager costs. This provides a view of potential earnings for a franchisee who takes a more hands-off, investor-oriented approach to the business.
It's important to note that this data does not include or account for any other operating costs or expenses not specifically identified in the explanatory notes within the FDD. The FDD assumes that the general manager will report directly to the franchisee. The financial performance representation is based on the historical performance of affiliate-owned locations during the 2024 calendar year. These locations are in Jacksonville, Florida, or the surrounding area, where the Degree Wellness brand has established goodwill.
Studio 2's performance data should be considered in the context that it does not offer contrast therapy or cold plunge and lacks showers, which are key services and features of the Degree Wellness concept. The FDD indicates that Studio 2 is being relocated to a new site to offer these services. Additionally, Studio 2 was excluded from Chart 2, which discloses the historical performance of 3 affiliate-owned locations for the first quarter of 2025, because it was in the process of being relocated and winding down operations during that period. Therefore, its 2024 financial results may not be indicative of its future performance once the relocation is complete and the full range of services are offered.
Prospective franchisees should carefully review the explanatory notes and general notes in Item 19 of the FDD to fully understand the assumptions and limitations of this financial performance representation. They should also consider the specific characteristics of their potential location and market when evaluating the potential financial performance of a Degree Wellness franchise.