What merchant fees are deducted from Fitstop franchisee 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, when members pay for approved products or services through Fitstop's online ordering system, Fitstop receives these payments on behalf of the franchisee. However, before the funds are passed on to the franchisee, certain deductions are made.
Specifically, Fitstop deducts any merchant fees they incur when initially receiving the payments from members. Additionally, they deduct any merchant fees incurred when transferring these payments to the franchisee. These deductions are taken from the gross amount before the balance is paid out to the franchisee on the third calendar day of each month.
In addition to merchant fees, Fitstop also deducts any amounts payable by the franchisee to Fitstop under the Franchise Agreement from these online payments. This means that franchisees will receive the revenue from online sales of approved products and services, minus any merchant fees from the initial transaction, merchant fees from the transfer, and any other outstanding payments owed to Fitstop.