What is included in the definition of 'Gross Revenue' for a Brain Balance franchise when calculating royalty payments?
Brain_Balance Franchise · 2025 FDDAnswer from 2025 FDD Document
"Gross Revenue (GR)" is defined as all sums received by FRANCHISEE resulting directly or indirectly from services provided pursuant to the operation of the Franchised Business without deductions of any kind other than refunds. "GR" shall exclude the transactional credit card service fees negotiated by COMPANY and sales tax, excise tax, or other similar taxes received by FRANCHISEE. COMPANY has negotiated a discount credit card service fee with a credit card clearing house service provider, which will be the maximum service fee deducted from GR arising out of credit card purchases regardless of whether FRANCHISEE participates in this program. Credit card expenses such as machinery, equipment, and connection charges will not be excluded from GR. GR shall also exclude Program Kits Fees and Loan Fees deducted by lending vendors.
Source: Item 22 — CONTRACTS (FDD pages 70–72)
What This Means (2025 FDD)
According to Brain Balance's 2025 Franchise Disclosure Document, Gross Revenue (GR) is defined as all sums received by the franchisee, directly or indirectly, from services provided through the operation of the franchised business. This calculation is made without deductions of any kind, except for refunds.
However, there are specific exclusions from the Gross Revenue calculation. These exclusions include transactional credit card service fees negotiated by Brain Balance and sales, excise, or other similar taxes received by the franchisee. The document specifies that Brain Balance has negotiated a discount credit card service fee with a credit card clearing house service provider, which will be the maximum service fee deducted from GR arising out of credit card purchases, regardless of whether the franchisee participates in this program.
It is important to note that while certain credit card service fees are excluded, credit card expenses such as machinery, equipment, and connection charges are not excluded from Gross Revenue. Additionally, Program Kits Fees and Loan Fees deducted by lending vendors are also excluded from the Gross Revenue calculation for royalty purposes.