What items are excluded from the Gross Sales calculation for a Body20 franchise?
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 for the purpose of calculating royalty fees includes all revenue a franchisee receives from operating their studio. This includes revenue from cash, checks, credit or debit cards, gift cards, and other credit transactions, regardless of when the products or services are provided. Gross Sales also includes proceeds from business interruption insurance related to revenue loss and promotional allowances or rebates received for purchasing products or customer referrals.
However, the document specifies certain exclusions from the Gross Sales calculation. Specifically, Body20 franchisees can exclude (i) any bona fide returns and credits actually provided to customers and (ii) any sales or other taxes that you collect from customers and pay directly to the appropriate taxing authority.
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 means that the royalty fee will be calculated on the total revenue before these fees are deducted, which could slightly increase the royalty payment. Understanding these inclusions and exclusions is crucial for Body20 franchisees to accurately calculate their royalty fees and manage their financial obligations to the franchisor.