What deductions are made from a Fitstop franchisee's online sales payments?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
13.9 Related Acknowledgements. The parties acknowledge and agree that (i) all payments made by members in respect of Approved Products and/or Approved Services which you provide to members from your Franchise must be processed through our online ordering system via our website or our application; (ii) we may, in our reasonable discretion, allocate discounted or free memberships to members who work at our headquarters, other team members, corporate partners, athletes and ambassadors and sponsors of our brand; (iii) there is no exclusivity of members and members may openly choose to deal with any franchisee, regardless of the member's location; (iv) subject to the below, all payments received by us from members who pay for Approved Products and/or services which you provide from your Franchise through our online ordering system via our website or the application are accepted by us for and on your behalf unless advised otherwise by us in writing at any time during the Term; and (v) all amounts from the sale of the Approved Products and/or services which you provide from your Franchise that we receive from members through our online ordering system via our website or the application are set up to be paid by a third party vendor to you on the third calendar day of each month less:
13.9.1 any merchant fees that we incur upon receipt of the payments referred to within this clause;
13.9.2 any merchant fees that we incur when transferring such payments to you; and
13.9.3 any amount payable by you to us under this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 50–135)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, payments for Approved Products and Services that members make through Fitstop's online ordering system are processed by Fitstop and then paid to the franchisee via a third-party vendor on the third calendar day of each month. However, the gross payment is subject to certain deductions.
Specifically, Fitstop will deduct three types of fees from the gross amount of online sales before disbursing the payment to the franchisee. These deductions include any merchant fees that Fitstop incurs when initially receiving the payments from customers. Additionally, Fitstop deducts any merchant fees associated with transferring the funds to the franchisee.
Finally, Fitstop deducts any other amounts that the franchisee owes to Fitstop under the Franchise Agreement. These deductions collectively reduce the net amount a Fitstop franchisee receives from online sales, as they cover transaction costs and other financial obligations to the franchisor. Franchisees should factor these deductions into their financial projections and understand their potential impact on profitability.