Can Fitstop's approved supplier deduct the royalty fee from the Gross Revenue of the franchised business?

According to Fitstop's 2024 Franchise Disclosure Document, Fitstop's approved supplier can deduct the royalty fee from the Gross Revenue of the franchised business for billing/collection services. The Royalty Fee is the greater of 7% of the Gross Revenue generated by the Franchised Business or $1,500/month (the "Minimum Royalty").

Gross Revenue for Fitstop includes the total amount of consideration, whether cash, credit, or payment in kind, received for all goods sold and services (including all membership fees and other revenue generated from the sale of Approved Services and Approved Products), including barter (exchange of tuition for services or products). Gross Revenue excludes refunds, uncollectible debts, taxes collected and paid to a tax authority, and tuition credits for staff children. There shall be deducted from Gross Revenue the price of goods returned by customers for exchange, provided that such returned goods shall have been previously included in Gross Revenue, and provided that the sales price of goods delivered to the customer in exchange shall be included in Gross Revenue. Gross Revenue shall not include the amount of any sales tax imposed by any federal, state, municipal, or other governmental authority directly on sales and collected from customers, provided that the amount thereof is added to the selling price or absorbed therein and actually paid by you to such governmental authority. Each charge or sale upon credit shall be treated as a sale for the full price in the month during which such charge or sale shall be made, irrespective of the time when you shall receive payment (whether full or partial) therefor.

This means that Fitstop franchisees will not directly handle the payment of royalty fees. Instead, the approved supplier providing billing and collection services will automatically deduct the royalty fee from the gross revenue before remitting the balance to the franchisee. This process ensures that Fitstop receives its royalty fees in a timely manner and reduces the administrative burden on the franchisee.