What revenue sources are specifically excluded from the 'Gross Revenue' calculation for a Dermani Medspa franchise?
Dermani_Medspa Franchise · 2025 FDDAnswer from 2025 FDD Document
"Gross Revenue" of the Franchised Business means all of the dermani MEDSPA'®s revenue generated from the sale of all medical spa and cosmetic services related to skin rejuvenation, cosmetic injectables, laser hair removal treatments, membership fees, and all other products and services offered at or from the dermani MEDSPA®, and all other income of every kind and nature related to, derived from, or originating from the dermani MEDSPA®, whether at retail or wholesale, including off-premises services, mobile clinics, and temporary locations (whether these sales are permitted or not), and proceeds of any business interruption insurance policies, whether any of the products or services are sold for cash, check, or credit, and regardless of collection in the case of check or credit; except that "Gross Revenue" excludes any tips received by staff or personnel who will provide the actual medical services, clients customer refunds, discounts from coupon sales, sales taxes, and/or other taxes collected from customers by you and actually transmitted to the appropriate taxing authorities.
Source: Item 6 — OTHER FEES (FDD pages 14–20)
What This Means (2025 FDD)
According to Dermani Medspa's 2025 Franchise Disclosure Document, the calculation of 'Gross Revenue' for royalty fee purposes excludes specific income sources. Gross Revenue includes all revenue from medical spa and cosmetic services, skin rejuvenation, cosmetic injectables, laser hair removal treatments, membership fees, and all other products and services offered at the medspa. It also encompasses all other income related to the Dermani Medspa, whether at retail or wholesale, including off-premises services, mobile clinics, temporary locations, and proceeds from business interruption insurance policies. This applies regardless of whether sales are made for cash, check, or credit, and irrespective of collection status.
However, the following items are specifically excluded from the Gross Revenue calculation: tips received by staff or personnel who provide medical services, client customer refunds, discounts from coupon sales, sales taxes, and other taxes collected from customers that are then transmitted to the appropriate taxing authorities. This means that Dermani Medspa franchisees do not have to pay royalty fees on these particular revenue streams, which can help to lower their overall operating costs and improve profitability.
Dermani Medspa also retains the right to modify its policies regarding revenue recognition and the inclusion or exclusion of certain revenue from Gross Revenue as business practices and technology change. This allows Dermani Medspa to adapt to new technologies and practices, such as daily deal discounts, and to clarify which revenues are included or excluded from Gross Revenue in those situations. This flexibility ensures that the royalty fee calculation remains relevant and fair as the business evolves.