How are credit charges or sales treated when calculating 'Gross Revenue' for a Fitstop franchise?

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

This definition of Gross Revenue is important because several fees payable to Fitstop are calculated as a percentage of Gross Revenue. These include the Technology Fee, which is currently 2% of Gross Revenue, and merchant payment processing costs, which are estimated to be between 2% and 4% of Gross Revenue.

Therefore, a Fitstop franchisee must remit fees based on the full credit sale amount in the month of the sale, even if the customer pays the franchisee in installments over several months. This could impact the franchisee's cash flow, as they are obligated to pay fees on revenue they haven't yet fully collected. Franchisees should factor this timing difference into their financial planning.