How does Boulder Designs define 'Collected Gross Revenue' for the purpose of calculating the Royalty Fee?
Boulder_Designs Franchise · 2025 FDDAnswer from 2025 FDD Document
Note 4. "Gross Revenues" means the aggregate of all income and monthly fees Franchisee receives from customers for the purchase or provision of any goods or services, including enrollment fees, or any other person or business entity for the Franchised Business in connection with the Franchised Business (whether or not in accordance with the terms of the Franchise Agreement) and whether for check, cash, credit or otherwise, from the sale of products and services (including service charges in lieu of gratuity) regardless of the dollar amount Franchisee sells each product or service for, including, without limitation, all proceeds from any business interruption insurance and any revenue generated from National Accounts, but excluding (a) all insurance payments, check, cash, credit or debit card refunds made in good faith provided, prior to granting the refunds, the revenue related to the refunds was included in Gross Revenues, (b) any sales and equivalent taxes that Franchisee collects for or on behalf of and pay to any governmental taxing authority, and (c) any rebate Franchisee receives from a manufacturer or supplier.
Source: Item 6 — OTHER FEES (FDD pages 11–16)
What This Means (2025 FDD)
According to Boulder Designs' 2025 Franchise Disclosure Document, 'Gross Revenues' is defined as the total income and monthly fees a franchisee receives from customers for goods or services. This includes enrollment fees or income from any person or business entity related to the franchised business, regardless of whether it aligns with the Franchise Agreement terms. This encompasses all forms of payment, such as checks, cash, or credit, derived from product and service sales, including service charges in place of gratuity, irrespective of the individual price of each item. It also includes proceeds from business interruption insurance and revenue from National Accounts.
However, Boulder Designs excludes certain items from 'Gross Revenues'. These exclusions include insurance payments, check, cash, credit, or debit card refunds made in good faith (provided the initial revenue was included in Gross Revenues), sales and equivalent taxes collected and remitted to governmental taxing authorities, and rebates received from manufacturers or suppliers.
For a prospective Boulder Designs franchisee, understanding this definition is crucial because the royalty fee is calculated as a percentage of Gross Revenue. Accurately tracking and reporting all income sources, while properly accounting for exclusions, is essential for compliance and accurate royalty payments. Franchisees should pay close attention to the inclusions and exclusions to ensure they are correctly calculating their Gross Revenues and, consequently, their royalty fees.