According to the Body20 FDD, where can I find the definition of Gross Sales?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Royalty Fee (2) | 8% of the Gross Sales of the Studio. | Currently due weekly by the 5th of each month (the "Payment Due Date") | See Note 2 for the definition of Gross Sales. |
| Brand Fund Fee | Currently, 2% of Gross Sales of the Studio. | The Payment Due Date | We have established and administer a Brand Fund and require you to contribute the Brand Fund Fee. We may increase the fee up to 4% of the Gross Sales of the Studio. See Note 2 for the definition of Gross Sales. |
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- "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, the definition of "Gross Sales" can be found in Note 2 of Item 6, which discusses other fees. Specifically, the Royalty Fee and Brand Fund Fee sections refer to Note 2 for the definition of Gross Sales. This note provides a detailed explanation of what constitutes Gross Sales for the purpose of calculating these fees.
Gross Sales includes all revenue received from operating the Body20 studio, regardless of the payment method (cash, credit card, etc.) or when the services were provided. It also includes any proceeds from business interruption insurance related to revenue loss. Promotional allowances or rebates are also factored into Gross Sales.
However, Gross Sales does not include bona fide returns and credits given to customers, or sales and other taxes collected and paid to the appropriate taxing authority. Furthermore, franchisees cannot deduct payment provider fees, such as bank or credit card fees, from their Gross Sales calculation. This definition is important for Body20 franchisees as it directly impacts the calculation of their Royalty Fee, which is 8% of Gross Sales, and the Brand Fund Fee, which is currently 2% of Gross Sales.