What is included in the definition of 'Gross Revenue' for a Fitstop franchise?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
- 13.2 Definition of "Gross Revenue". For the purposes of this Agreement, the term "Gross Revenue" shall mean the total amount of consideration, whether cash, credit, or payment in kind, received by you 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), and excluding 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.
Source: Item 23 — RECEIPTS (FDD pages 50–135)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, "Gross Revenue" is defined as the total income a franchisee receives, whether in cash, credit, or other forms of payment. This includes all sales of goods and services, such as membership fees and revenue from approved products and services. Bartering, where tuition is exchanged for services or products, is also included in Gross Revenue.
However, certain items are excluded from the calculation of Gross Revenue for Fitstop franchises. These exclusions include refunds, uncollectible debts, and taxes collected and paid to a tax authority. Tuition credits for staff children are also excluded. Additionally, the price of goods returned by customers for exchange can be deducted, provided the original sale was included in Gross Revenue and the replacement goods are included in Gross Revenue.
Sales taxes imposed by governmental authorities that are added to the selling price and paid by the franchisee to the government are also excluded from Gross Revenue. Each credit sale is treated as a sale for the full price in the month the sale is made, regardless of when the franchisee actually receives payment. This definition of Gross Revenue is important because it is the basis for calculating royalty fees and other contributions payable to Fitstop.