Who is responsible for the Studio's employee's salary and wages and fringe benefits at a Degree Wellness location?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
ate or cause to be created any lien or encumbrance on the Premises, the Marks, the System, or any other licensed item identified in this Section 4.
5. Fees and Other Charges for Management and Administrative Services.
- 5.1 In consideration for Management Company's performance of the Management Company Services and the grant of the licenses and sub-license set forth in Section 4, Licensed Provider hereby agrees to pay Management Company a management fee (herein called the "Management Fee"), which shall be the amount equal to the Gross Revenues of the Studio Management Business remaining after subtracting costs associated with Licensed Provider's salary and fringe benefits (and, if applicable, the Studio's employees' salary and wages and fringe benefits) as approved by Management Company, the Studio's payroll taxes and other withholding items, and any other Studio operating costs incurred by the Studio in accordance with this Agreement.
- (a) As used herein "Gross Revenues" shall mean the total of all revenue and receipts derived from the operation of the Studio, including all amounts received at or away from the site of the Studio or through the business the Studio conducts (such as fees for Studio Services, fees for the sale of any other services, gift certificate sales, and revenue derived from products sales, whether paid in cash or by check, credit card, or debit card, or other credit transactions); and excludes only sales taxes collected from patients and paid to the appropriate taxing authority, and any patient refunds and credits the Studio actually makes.
- 5.2 The Management Fee shall be paid to Management Company from the money transferred each day from Licensed Provider's Account into Management Company's operating account pursuant to Section 3.1(c).
- 5.3 The Management Fee, or any other fees due and payable under this Agreement, are not intended to be, and shall not be interpreted to be, payment for the referral of patients or recommendation of a referral of patients from Management Company to Licensed Provider or from Licensed Provider to Management Company.
**6.
Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 63–66)
What This Means (2025 FDD)
According to Degree Wellness's 2025 Franchise Disclosure Document, the Licensed Provider is responsible for the Studio's employees' salary and wages and fringe benefits. However, the Management Company is responsible for administering payroll and all insurance and fringe benefit plans of the Licensed Provider and any employees of the Licensed Provider.
The Management Company's responsibilities include billing and collecting fees charged by the Licensed Provider for the Studio Services, handling bookkeeping and accounting for the Studio Management Business and Studio operations, and managing advertising, promotions, and marketing programs for the Studio. The Management Company also applies funds from the Licensed Provider Account to pay the designated operating expenses of the Studio.
The Licensed Provider pays a management fee to the Management Company, calculated as the Gross Revenues of the Studio Management Business remaining after subtracting costs associated with the Licensed Provider's salary and fringe benefits (and, if applicable, the Studio's employees' salary and wages and fringe benefits) as approved by Management Company, the Studio's payroll taxes and other withholding items, and any other Studio operating costs incurred by the Studio in accordance with this Agreement. This arrangement highlights the importance of understanding the financial relationship between the Licensed Provider and the Management Company, as well as the allocation of responsibilities for employee compensation and benefits.