Can payment provider fees be deducted from Gross Sales when calculating the Body20 Royalty Fee?

According to Body20's 2025 Franchise Disclosure Document, franchisees are not allowed to deduct payment provider fees from their Gross Sales when calculating the Royalty Fee. Gross Sales are defined as all revenue received from operating the studio, regardless of the form of payment (cash, credit card, etc.) or when the services were provided.

This means that Body20 franchisees must calculate their 8% Royalty Fee on the total revenue before any deductions for bank fees, credit card processing fees, or gift card vendor fees. This can impact the franchisee's profitability, as these fees can add up, especially with the increasing use of credit and debit cards.

While Gross Sales does not include bona fide returns and credits actually provided to customers, or sales and other taxes collected from customers and paid directly to the appropriate taxing authority, franchisees must still pay the 8% royalty on the full amount of sales, without deducting payment processing costs. This is a standard practice in many franchise systems, as it simplifies the royalty calculation and ensures that the franchisor receives a consistent percentage of the franchisee's total revenue.