According to the Body20 FDD, what is excluded from the Gross Sales calculation?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
"Gross Sales" means all revenue that you receive or otherwise derive from operating the Studio, whether from cash, check, credit or debit card, gift card or gift certificate, or other credit transactions, and regardless of collection or when you actually provide the products or services in exchange for the revenue. If you receive any proceeds from any business interruption insurance applicable to loss of revenue at the Studio, there shall be added to Gross Sales an amount equal to the imputed Gross Sales that the insurer used to calculate those proceeds. Gross Sales includes promotional allowances or rebates paid to you in connection with your purchase of products or supplies or your referral of customers. Gross Sales does not include (i) any bona fide returns and credits that are actually provided to customers and (ii) any sales or other taxes that you collect from customers and pay directly to the appropriate taxing authority. You may not deduct payment provider fees (i.e., bank or credit card company fees and gift card vendor fees) from your Gross Sales calculation.
Source: Item 6 — OTHER FEES (FDD pages 19–26)
What This Means (2025 FDD)
According to Body20's 2025 Franchise Disclosure Document, Gross Sales include all revenue from operating the studio, whether from cash, credit, or other transactions, including proceeds from business interruption insurance and promotional allowances. However, the calculation of Gross Sales for Body20 specifically excludes certain items.
Specifically, the Gross Sales calculation for Body20 excludes (i) any bona fide returns and credits that are actually provided to customers and (ii) any sales or other taxes that you collect from customers and pay directly to the appropriate taxing authority. This means that if a customer returns a product or service and receives a refund or credit, that amount is not included in the Gross Sales figure. Similarly, sales taxes collected from customers and remitted to the government are also excluded from the Gross Sales calculation.
It is important to note that payment provider fees, such as bank or credit card company fees and gift card vendor fees, cannot be deducted from the Gross Sales calculation. This means that even though these fees represent a cost to the franchisee, they must still be included in the Gross Sales figure on which royalties and other fees are based. This is a fairly standard practice in franchising, as franchisors typically want to base royalties on the total revenue generated by the business before expenses.