How is the Body20 Royalty Fee calculated?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Royalty Fee (2) | 8% of the Gross Sales of the Studio. | Currently due weekly by the 5th of each month (the "Payment Due Date") | See Note 2 for the definition of Gross Sales. |
| Brand Fund Fee | Currently, 2% of Gross Sales of the Studio. | The Payment Due Date | We have established and administer a Brand Fund and require you to contribute the Brand Fund Fee. We may increase the fee up to 4% of the Gross Sales of the Studio. See Note 2 for the definition of Gross Sales. |
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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 Royalty Fee is calculated as 8% of the Gross Sales of the Studio. This fee is currently due weekly by the 5th of each month, referred to as the "Payment Due Date." Gross Sales encompasses all revenue received from operating the studio, including cash, checks, credit or debit cards, gift cards, and other credit transactions, regardless of when the products or services are provided.
Gross Sales also include proceeds from business interruption insurance related to revenue loss at the studio, 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 included in Gross Sales. However, bona fide returns and credits actually provided to customers, as well as sales or other taxes collected from customers and paid directly to the appropriate taxing authority, are excluded from Gross Sales.
It is important to note that Body20 franchisees cannot deduct payment provider fees, such as bank or credit card company fees and gift card vendor fees, from their Gross Sales calculation. This comprehensive definition of Gross Sales ensures that the Royalty Fee is based on a broad measure of revenue, with only specific, limited exclusions. This means franchisees need to be diligent in tracking all income streams and eligible deductions to accurately calculate and remit their weekly royalty payments.
For prospective Body20 franchisees, understanding the nuances of Gross Sales is crucial for financial planning and ensuring compliance with the franchise agreement. Accurately calculating and paying the Royalty Fee on time is essential for maintaining a good relationship with Body20 and avoiding potential penalties or breaches of contract.