When are the merchant payment processing costs payable for a Fitstop franchise?
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, merchant payment processing costs are payable immediately once collected by the Current Billing/POS Provider. These fees are paid to Fitstop's third-party Approved Supplier for such services as of the Issue Date. Currently, these fees are estimated to be between 2% and 4% of Gross Revenue generated by your Franchised Business on an ongoing basis.
For a prospective Fitstop franchisee, this means that a percentage of their gross revenue will be allocated to cover merchant payment processing. This cost is ongoing and directly tied to the revenue generated by the business. The fees are collected by the Current Billing/POS Provider and then passed on to Fitstop's Approved Supplier.
It is important for potential franchisees to factor this ongoing expense into their financial projections. The actual percentage charged may vary within the 2% to 4% range, so it's prudent to understand how this rate is determined and whether it could fluctuate. Franchisees should also confirm which specific third-party supplier is used and if there are any alternatives or preferred providers that could offer more favorable rates. Understanding the specifics of the billing and payment process is crucial for managing cash flow effectively.