What constitutes 'Gross Sales' for a Body20 franchise when calculating the Royalty Fee?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
(b) Gross Sales. "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 23 — RECEIPT (FDD pages 74–251)
What This Means (2025 FDD)
According to Body20's 2025 Franchise Disclosure Document, Gross Sales are central to calculating the weekly royalty fee, which is 8% of Gross Sales. Gross Sales encompass all revenue a franchisee receives from operating their Body20 studio. This includes revenue from various transaction methods such as cash, checks, credit or debit cards, gift cards or certificates, and other credit transactions. The timing of collection or service delivery doesn't affect inclusion; revenue is counted regardless of when collected or when the products/services are provided.
Gross Sales also include any proceeds from business interruption insurance related to revenue loss at the studio. The calculation will include an amount equal to the imputed Gross Sales that the insurer used to calculate those proceeds. Promotional allowances or rebates paid to the franchisee in connection with their purchase of products/supplies or customer referrals are also included in Gross Sales.
However, Gross Sales do not include bona fide returns and credits actually provided to customers, nor do they include sales or other taxes that the franchisee collects from customers and remits directly to the appropriate taxing authority. Furthermore, franchisees cannot deduct payment provider fees, such as bank, credit card company, or gift card vendor fees, from their Gross Sales calculation. This comprehensive definition ensures that all income sources are accounted for when determining the royalty fee owed to Body20.