If a Body20 franchisee's Gross Sales increase, does the Royalty Fee amount increase?

According to Body20's 2025 Franchise Disclosure Document, the Royalty Fee is directly related to the Gross Sales of the studio. The Royalty Fee is 8% of the Gross Sales, meaning that as the Gross Sales increase, the Royalty Fee amount will also increase.

Gross Sales are defined as all revenue received from operating the studio, including cash, credit, debit cards, gift cards, and other credit transactions, regardless of when the products or services were provided. Gross Sales also include proceeds from business interruption insurance related to revenue loss and promotional allowances or rebates. Gross Sales do not include bona fide returns and credits to customers or sales and other taxes collected and paid to the appropriate taxing authority. Payment provider fees cannot be deducted from Gross Sales.

This royalty structure is common in franchising, where the franchisor benefits directly from the franchisee's success. For a prospective Body20 franchisee, this means that while increased sales lead to higher royalty payments, they also indicate a more profitable business. Franchisees should focus on strategies to maximize Gross Sales, keeping in mind the expenses that can and cannot be deducted when calculating the royalty fee.