What items are excluded from 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.
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, whether in cash, credit, or other forms of payment, that a franchisee receives from selling goods and services. This includes all membership fees and revenue from approved services and products, as well as barter transactions. However, certain items are specifically excluded from this definition.
Specifically, the following are not included in the calculation of Gross Revenue for a Fitstop franchise: refunds, uncollectible debts, taxes collected and paid to a tax authority, and tuition credits for staff children. Additionally, the amount of any sales tax imposed by a governmental authority that is directly on sales and collected from customers is excluded, provided that the amount is added to the selling price or absorbed therein and actually paid to the governmental authority.
It is important for prospective Fitstop franchisees to understand what constitutes Gross Revenue because the royalty fee and brand development fund contribution are calculated as a percentage of Gross Revenue. Therefore, accurately tracking and reporting Gross Revenue is essential for compliance with the franchise agreement and for managing the financial performance of the Fitstop business.