What were the payroll expenses for Studio 1 of Degree Wellness?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
2 has terminated its original lease and entered into a new lease. However, it has not yet completed its relocation.
Chart 1 – Profit and Loss for Calendar Year 2024
| | 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% |
Chart 2 Profit and Loss for First Quarter 2025
Chart 2 discloses the historical performance of 3 affiliate-owned locations for the first quarter of 2025 (the "2025 Measurement Period"). Studio 2 was excluded from this chart on the basis that it is in the process of being relocated and was in the process of winding down operations during the 2025 Measurement period.
Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 60–63)
What This Means (2025 FDD)
According to Degree Wellness's 2025 Franchise Disclosure Document, Studio 1 had payroll expenses of $137,648, which accounted for 18.6% of its revenue. The FDD defines payroll expenses as all hourly and salaried labor excluding general managers, including based wages, payroll taxes, and benefits. This definition excludes the cost of multi-unit managers.
For a prospective franchisee, this means that nearly 19% of Studio 1's revenue was allocated to payroll, excluding the general manager's salary. This figure is important for understanding the labor costs associated with running a Degree Wellness studio. It is essential to consider that these figures are based on the performance of an affiliate-owned location and that a franchisee's individual results may vary.
It is also important to note that Studio 1 and Studio 2 of the Disclosed Affiliate Locations were open for some time as of the commencement of the 2024 calendar year. As such, the profit and loss information disclosed for certain of the disclosed affiliate locations of this Item did not incur certain of the startup/initial costs that might be incurred when first opening a Studio given their more mature operations. Therefore, the payroll expenses may be different during the initial months of operation for a new franchise location. Franchisees should carefully consider these factors and conduct their own due diligence to project potential payroll expenses for their specific location.