Are chargebacks deducted from the calculation of Gross Revenues for a Basecamp Fitness studio?
Basecamp_Fitness Franchise · 2025 FDDAnswer from 2025 FDD Document
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- "Gross Revenues," shall mean the total amount of revenues generated from all business activities taking place by, through or at the Basecamp Studio, in the form of cash or credit, plus the fair market value of products delivered and services rendered to you, or to your designee, in consideration for products and services provided in, from, or in conjunction with your Basecamp Studio. There will be excluded from "Gross Revenues" bona fide refunds, credits given or allowed to members and other customers for the return of merchandise and amounts collected from members and other customers and remitted by you to any governmental taxing authority in satisfaction of sales taxes, however, chargebacks are not deducted from the calculation of Gross Revenues.
Source: Item 22 — CONTRACTS (FDD pages 61–62)
What This Means (2025 FDD)
According to Basecamp Fitness's 2025 Franchise Disclosure Document, chargebacks are not deducted from the calculation of Gross Revenues. The document specifies that Gross Revenues include the total amount of revenues generated from all business activities at the Basecamp Studio, whether in cash or credit. It also includes the fair market value of products and services provided in conjunction with the studio.
While bona fide refunds and credits given to members for returned merchandise, along with sales taxes remitted to governmental authorities, are excluded from Gross Revenues, chargebacks are explicitly not deducted. This means that even if a customer disputes a charge and the payment is reversed, the initial revenue is still included in the calculation of Gross Revenues for royalty fee purposes.
This policy could impact a franchisee's profitability, as they are required to pay a percentage of the Gross Revenues as a royalty fee, which is eight percent (8%). Franchisees should be aware of this policy and factor potential chargebacks into their financial projections. Understanding this aspect of revenue calculation is crucial for managing finances and ensuring accurate royalty payments to Basecamp Fitness.