What is included in the definition of 'Gross Sales' for a Bft franchise?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
5.3 Gross Sales. "Gross Sales" means the total revenue, in whatever form, generated by the Studio, whether or not in compliance with this Agreement and regardless of receipt, including all revenue generated from the sale and provision of any and all gift cards and other products and services at or through the Studio and all proceeds from any business interruption insurance related to the non-operation of the Studio. "Gross Sales" does not include (a) any sales tax and equivalent taxes that are collected by Franchisee for or on behalf of any governmental taxing authority and paid thereto, or (b) the value of any allowance issued or granted to any client of the Studio that is credited in good faith by Franchisee in full or partial satisfaction of the price of the Approved Products or Approved Services offered in connection with the Studio.
Source: Item 23 — RECEIPTS (FDD pages 79–265)
What This Means (2025 FDD)
According to Bft's 2025 Franchise Disclosure Document, "Gross Sales" is defined as the total revenue generated by the studio, regardless of whether it complies with the agreement or if the revenue has been received. This includes all revenue from the sale and provision of gift cards, other products and services at or through the studio, and all proceeds from business interruption insurance related to the studio's non-operation.
However, the definition of "Gross Sales" for a Bft franchise specifically excludes sales tax and equivalent taxes collected and paid to governmental taxing authorities. It also excludes the value of any allowance issued or granted to any client of the studio that is credited in good faith by the franchisee in full or partial satisfaction of the price of approved products or services offered in connection with the studio.
For a prospective Bft franchisee, understanding this definition is crucial because the royalty fee, which is seven percent (7%), is calculated based on Gross Sales. Accurately tracking and reporting all revenue streams, while properly accounting for the exclusions, will ensure compliance with the franchise agreement and avoid potential disputes with Bft.