How are Fitstop's merchant payment processing costs determined?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
| Merchant payment processing costs | Then-current amount charged by our Approved Supplier (if applicable) Currently, these fees are estimated to be between 2% and 4% of Gross Revenue generated by your Franchised Business on an ongoing basis | Payable immediately once collected by the Current Billing/POS Provider | These amounts are payable to our third-party Approved Supplier for such services as of the Issue Date. |
Explanatory Notes to Item 6 Chart Above
- Definition of Gross Revenue. For purposes of this Disclosure Document, 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 6 — OTHER FEES (FDD pages 11–15)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, merchant payment processing costs are determined by the then-current amount charged by Fitstop's Approved Supplier, if applicable. Currently, these fees are estimated to be between 2% and 4% of the Gross Revenue generated by the Franchised Business on an ongoing basis. These amounts are payable immediately once collected by the Current Billing/POS Provider and are payable to Fitstop's third-party Approved Supplier for such services as of the Issue Date.
For a prospective Fitstop franchisee, this means that a percentage of their gross revenue will be allocated to cover the costs associated with processing payments. The exact percentage will depend on the rates charged by Fitstop's chosen payment processor. It is important to note that Fitstop retains the right to modify the Approved Supplier.
Gross Revenue, as defined in the FDD, includes the total amount of consideration received for all goods and services, including membership fees and revenue from Approved Services and Products. Exclusions from Gross Revenue include refunds, uncollectible debts, taxes collected and paid to a tax authority, and tuition credits for staff children. Understanding what constitutes Gross Revenue is crucial, as it directly impacts the calculation of these payment processing fees.