What amounts are deducted from 'Gross Sales' when calculating gross sales for an Aira Fitness franchise?
Aira_Fitness Franchise · 2025 FDDAnswer from 2025 FDD Document
Gross Sales. "Gross Sales" as used herein means the total gross sales from the provision of all products and services sold or performed by or for you or the Aira Fitness Business in, at, from or away from the Aira Fitness Business, or through or by means of the Aira Fitness Business' business, whether from cash, check, credit card, debit card, barter or exchange, or other credit transactions, and irrespective of the collection thereof, and including, without limitation, the following: (a) membership fees, including, without limitation, initiation fees, enrollment fees, processing fees, paid-in-full dues, renewal fees, corporate/third party payor fees, monthly dues and any fees or revenue generated and derived during any presales; (b) fees and charges for optional or ancillary services; and (c) revenue derived from merchandise and product sales.
Notwithstanding the foregoing, the following amounts will be deducted from "Gross Sales": (i) sales taxes, use taxes, and other similar taxes added to the sales price and collected from the customer and paid to the appropriate taxing authority; and (ii) any bona fide refunds and credits that are actually provided to customers.
Source: Item 23 — **RECEIPTS (FDD pages 59–254)
What This Means (2025 FDD)
According to Aira Fitness's 2025 Franchise Disclosure Document, the calculation of 'Gross Sales' for the purpose of determining royalties and other fees involves specific deductions. Gross sales encompass all revenue generated from products and services, including membership fees, charges for optional services, and merchandise sales. This broad definition ensures that all income streams are included in the gross sales figure before any deductions are applied.
However, Aira Fitness allows for certain deductions from this total. Specifically, franchisees can deduct (i) sales taxes, use taxes, and other similar taxes added to the sales price and collected from customers, which are then paid to the appropriate taxing authority, and (ii) any bona fide refunds and credits that are actually provided to customers. These deductions ensure that franchisees are not paying royalties or fees on amounts that are passed through to taxing authorities or returned to customers.
For a prospective Aira Fitness franchisee, understanding these deductions is crucial for accurately calculating gross sales and, consequently, the royalties and fees owed to the franchisor. It is important to maintain meticulous records of all sales, taxes collected, and refunds issued to ensure compliance with the franchise agreement and to avoid potential disputes or audits. Furthermore, franchisees should be aware that any understatement of gross sales discovered during an audit may result in additional penalties and costs, as detailed elsewhere in the FDD.