Can Degree Wellness require franchisees to participate in an electronic funds transfer program?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
The amount actually transferred from the Account to pay Continuing Franchise Fees and Fund contributions will be based on the Franchise's gross revenues reported to us.
If you have not reported the Franchise's gross revenues for any reporting period, then we will be authorized to debit the Account in an amount equal to 120% of the Continuing Franchise Fee, Fund contribution, and other amounts transferred from the Account for the last reporting period for which a report of the Franchise's gross revenues was provided to us.
If at any time we determine that you have under-reported the Franchise's gross revenues or underpaid any Continuing Franchise Fee or Fund contribution due us under this Agreement, then we will be authorized to initiate immediately a debit to the Account in the appropriate amount, plus applicable interest, in accordance with the foregoing procedure.
Any overpayment will be credited, without interest, against the Continuing Franchise Fee, Fund contribution, and other amounts we otherwise would debit from your account during the following reporting period.
Our use of electronic funds transfers as a method of collecting Continuing Franchise Fees and Fund contributions due us does not constitute a waiver of any of your obligations to provide us with monthly reports as provided in Section 12, nor shall it be deemed a waiver of any of the rights and remedies available to us under this Agreement.
- 6.8 Application of Payments; No Set-Off.
When we receive a payment from you, we have the right in our sole discretion to apply it as we see fit to any past due indebtedness of yours due to us or our affiliates, whether for Continuing Franchise Fees, Fund contributions, purchases, interest, or for any other reason, regardless of how you may designate a particular payment should be applied.
Source: Item 23 — Receipts (FDD pages 66–257)
What This Means (2025 FDD)
According to Degree Wellness's 2025 Franchise Disclosure Document, Degree Wellness does mandate the use of electronic funds transfers for the collection of Continuing Franchise Fees and Fund contributions. This means that as a franchisee, you will be required to participate in this program.
The amount transferred will be based on the gross revenues reported to Degree Wellness. If a franchisee fails to report gross revenues, Degree Wellness is authorized to debit an amount equal to 120% of the amount transferred from the account for the last reporting period. Degree Wellness also has the right to debit the account immediately for any under-reported gross revenues or underpaid fees, including applicable interest.
Any overpayments made through electronic funds transfer will be credited back to the franchisee's account, without interest, during the following reporting period. It is important to note that Degree Wellness's use of electronic funds transfers does not waive the franchisee's obligation to provide monthly reports or any other rights and remedies available to Degree Wellness under the agreement. Degree Wellness retains the right to apply payments to past due debts at their discretion, regardless of how the franchisee designates the payment.