Where can I find the definition of Gross Sales for Body20?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
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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 the notes section of Item 6, which discusses other fees. Specifically, Note 2 defines "Gross Sales" as all revenue a franchisee receives from operating their Body20 studio. This includes revenue from various payment methods like cash, checks, credit/debit cards, and gift cards, regardless of when the products or services are provided.
The definition also clarifies that proceeds from business interruption insurance related to revenue loss at the studio are included in Gross Sales, calculated based on the imputed Gross Sales used by the insurer. Promotional allowances or rebates received in connection with product purchases or customer referrals are also part of Gross Sales. However, bona fide returns and credits actually provided to customers, as well as sales or other taxes collected and paid to the appropriate taxing authority, are excluded from the Gross Sales calculation.
It is important to note that Body20 franchisees cannot deduct payment provider fees, such as bank, credit card company, or gift card vendor fees, from their Gross Sales calculation. This definition is crucial because several fees, including the Royalty Fee (8% of Gross Sales) and the Brand Fund Fee (currently 2% of Gross Sales, potentially increasing to 4%), are based on this figure. Understanding what constitutes Gross Sales is essential for accurately calculating these fees and managing the financial aspects of a Body20 franchise.