How is 'under-reporting gross revenues' determined for a Degree Wellness franchise?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Source: Item 23 — Receipts (FDD pages 66–257)
What This Means (2025 FDD)
According to Degree Wellness's 2025 Franchise Disclosure Document, if Degree Wellness determines that a franchisee has under-reported gross revenues, Degree Wellness is authorized to immediately debit the franchisee's account for the underpaid amount, plus interest. The amount that is debited from the account to pay for continuing franchise fees and fund contributions is based on the gross revenues reported to Degree Wellness by the franchisee.
If a Degree Wellness franchisee fails to report gross revenues for any reporting period, Degree Wellness is authorized to debit the franchisee's 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 in which the franchisee provided a report of gross revenues. Any overpayment by the franchisee will be credited against the continuing franchise fee, fund contribution, and other amounts that Degree Wellness would otherwise debit from the franchisee's account during the following reporting period.
Degree Wellness's use of electronic funds transfers to collect continuing franchise fees and fund contributions does not constitute a waiver of the franchisee's obligation to provide monthly reports, nor does it waive any of Degree Wellness's rights and remedies under the agreement. This means that even if Degree Wellness uses electronic transfers, the franchisee is still required to provide monthly reports, and Degree Wellness retains all rights and remedies available to them under the franchise agreement.