Are Body20 franchisees allowed to deduct payment provider fees from their Gross Sales calculation?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
- 3.3 Brand Fund Fee.
3.2 Royalty Fee.
(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.
Source: Item 23 — RECEIPT (FDD pages 74–251)
What This Means (2025 FDD)
According to Body20's 2025 Franchise Disclosure Document, franchisees are not allowed to deduct payment provider fees from their Gross Sales calculation. This includes fees from banks, credit card companies, and gift card vendors. Gross Sales for Body20 includes all revenue received from operating the studio, whether it's from cash, check, credit or debit card, gift card, or other credit transactions, regardless of when the products or services are provided.
This means that Body20 franchisees must calculate their royalty and other fees based on the total revenue before deducting any payment processing fees. This can increase the amount of fees owed to the franchisor, as these fees are typically calculated as a percentage of Gross Sales.
While Gross Sales includes promotional allowances or rebates, it does not include bona fide returns and credits actually provided to customers, or sales and other taxes collected from customers and paid to the appropriate taxing authority. Therefore, franchisees should carefully track their revenue and deductions to ensure accurate reporting and fee calculation.