To whom are Fitstop's merchant payment processing costs payable?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
| Indemnification | The costs and expenses we incur in connection with your breach or default under your Franchise Agreement or otherwise in the ownership and operation of your Franchised Business. | As incurred by you. | You are solely responsible and must indemnify and hold us harmless for all loss, damage, claims or demands arising from your Franchise including, but not limited to, any joint employment claims. |
|---|---|---|---|
| Annual Convention Fee | We expect this amount to be around $1,500 to $2,000 per attendee | Paid monthly by you. | You will also be responsible for covering the costs that attendees incur in connection with attending any such event. |
| 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. |
Source: Item 6 — OTHER FEES (FDD pages 11–15)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, the merchant payment processing costs are payable to Fitstop's third-party Approved Supplier. These costs are the then-current amount charged by the Approved Supplier, estimated to be between 2% and 4% of the Gross Revenue generated by the Franchised Business. These fees are payable immediately once collected by the Current Billing/POS Provider.
For a prospective Fitstop franchisee, this means that a portion of their gross revenue will be allocated to cover merchant payment processing fees. These fees are not paid to Fitstop directly but to a third-party vendor that Fitstop has approved. The fees are ongoing and calculated as a percentage of gross revenue, so they will fluctuate with the business's sales volume.
It is important for potential franchisees to understand who the Approved Supplier is and what services they provide for these fees. Franchisees should also inquire about the possibility of these fees changing over time, as they are described as the 'then-current amount charged.' Understanding the specifics of the Current Billing/POS Provider and their processes for collecting and remitting these fees is also crucial for managing cash flow and financial planning.