How are credit charges or sales treated when calculating Fitstop's Gross Revenue?

According to Fitstop's 2024 Franchise Disclosure Document, when calculating Gross Revenue, each credit charge or sale is treated as a sale for the full price during the month the charge or sale is made. This applies regardless of when Fitstop receives payment, whether it's a full or partial payment.

This means that Fitstop franchisees must include the full value of credit sales in their Gross Revenue calculations for royalty and fund contribution purposes in the month the sale occurs, even if the payment is received later or in installments. This is a standard practice in franchising, as it simplifies revenue tracking and ensures consistent royalty payments.

For a prospective Fitstop franchisee, this policy means that cash flow management is crucial. Franchisees need to be prepared to pay royalties and fund contributions on credit sales before they actually receive the cash from those sales. This could impact their working capital needs, especially in the early stages of operation or during periods of high credit sales volume.