What is the purpose of the advertising fund for Degree Wellness franchises?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
11. ADVERTISING.
11.1 By Degree Wellness. As stated in Paragraph 6.3a, due to the importance of promoting the public image of Degree Wellness Studio franchises, we will establish, maintain, and administer the Fund to support and pay for national, regional, or local marketing and promotional programs that we deem necessary, desirable, or appropriate, in our sole discretion, to promote the good will and image of all Degree Wellness Studio franchises. You will contribute to the Fund in the amount set forth in Section 6.3a. We agree that any Studios owned by us or our affiliates will be required to contribute to the Fund on at least the same basis as you do, subject only to limitation under applicable law.
Degree Wellness will be entitled to direct all advertising programs financed by the Fund, with sole discretion over (i) the creative concepts, materials, endorsements, and media used therein, and (ii) the geographic, market, and media placement and allocation of the programs. Degree Wellness shall have the right to determine, in its sole discretion, the composition of all geographic territories and market areas for the development and implementation of such programs. You agree that the Fund may be used to pay any and all costs of maintaining, administering, directing, and preparing national, regional or local advertising
Source: Item 23 — Receipts (FDD pages 66–257)
What This Means (2025 FDD)
According to Degree Wellness's 2025 Franchise Disclosure Document, the advertising fund, referred to as the "Fund," is established to promote the public image and goodwill of Degree Wellness Studio franchises. Degree Wellness has the authority to direct all advertising programs financed by the Fund, including creative concepts, materials, media, and the geographic placement of the programs. The aim is to support national, regional, or local marketing and promotional programs deemed necessary by Degree Wellness to enhance the brand's image. Franchisees are required to contribute to this fund. Degree Wellness also states that any Studios owned by them or their affiliates will contribute to the Fund on the same basis as franchisees.
The Fund is intended to maximize recognition of the Degree Wellness marks and the goodwill associated with the franchises. The costs covered by the fund include preparing and conducting media programs (television, radio, internet, etc.), marketing research, website development, administering regional advertising, employing marketing agencies, developing online asset management tools, and providing promotional materials to franchisees. The funds are accounted for separately from Degree Wellness's other funds and will not be used for general operating expenses, except for reasonable salaries and administrative costs related to the fund's administration and advertising programs.
Degree Wellness does not guarantee that advertising expenditures in any specific geographic area will be proportionate to the contributions from franchisees in that area, nor that any franchisee will directly benefit in proportion to their contribution. Degree Wellness retains the right to terminate the Fund with 30 days' notice, distributing any unspent monies between Degree Wellness and the franchisees based on their respective contributions. They also reserve the right to reinstate the Fund under the same terms with similar notice. Franchisees are required to contribute one percent (1%) of their gross revenues to the Fund, payable weekly, alongside their continuing franchise fees. This contribution can increase, but will not exceed 2% of gross revenue. Degree Wellness may also establish a separate program in the future to provide additional local marketing services, which would be required for all Studio franchises, for an additional fee.