What is excluded from the 'Gross Revenue' calculation for a Bft studio?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
- "Gross Revenue" means the total revenue generated by a given Studio, including all revenue generated from the sale and provision of any and all approved services at, from, or otherwise through, that Studio. Gross Revenue excludes sales tax (that the Studio owner must pay directly to the appropriate taxing authority). Please note, Gross Revenue is defined differently than how "Gross Sales" is defined in the Franchise Agreement, and as such, the amount of Royalty fees you pay under the Franchise Agreement may be different than if applied to Gross Revenue data provided below.
Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 67–75)
What This Means (2025 FDD)
According to Bft's 2025 Franchise Disclosure Document, the definition of 'Gross Revenue' for a studio includes the total revenue generated from all approved services. However, it specifically excludes sales tax that the studio owner is required to remit directly to the appropriate taxing authority. This means that when calculating the total revenue of a Bft studio for financial reporting and royalty purposes, franchisees do not include the amount collected for sales tax.
This exclusion is important for prospective franchisees because it affects the calculation of royalty fees and other financial obligations to Bft. While 'Gross Revenue' is used for financial performance representations in the FDD, it's defined differently than 'Gross Sales' in the Franchise Agreement. Therefore, the royalty fees paid under the Franchise Agreement may differ from what one might expect based on the Gross Revenue data provided in the FDD.
Understanding this distinction is crucial for accurately projecting potential earnings and financial obligations. Franchisees should carefully review the definitions in both the FDD and the Franchise Agreement to ensure they understand how 'Gross Revenue' and 'Gross Sales' are calculated and used. This will help in making informed financial decisions and avoiding potential discrepancies in royalty payments.