Are discounts approved by Floyds 99 included in Gross Sales for calculating the Royalty fee?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Royalty1 | 6% of Gross Sales | Payable on the day of the week we periodically designate, based on prior week's Gross Sales | Gross Sales include all revenue from the Barbershop, including sales made away from the Barbershop premises. Gross Sales do not include sales taxes and discounts that have been approved by us in advance. Royalties are paid by electronic transfer of funds. |
Source: Item 6 — OTHER FEES (FDD pages 14–20)
What This Means (2025 FDD)
According to Floyds 99's 2025 Franchise Disclosure Document, Gross Sales, which are used to calculate royalty fees, do not include sales taxes and discounts that have been approved by Floyds 99 in advance. The royalty fee is 6% of Gross Sales. Gross Sales include all revenue from the Barbershop, including sales made away from the Barbershop premises.
This means that franchisees will not pay royalties on the portion of revenue covered by approved discounts or sales taxes. This can reduce the overall royalty burden, as the royalty is calculated on a net sales figure rather than the total revenue before discounts and taxes.
It is important for prospective franchisees to understand what types of discounts Floyds 99 will approve, as only these discounts are excluded from Gross Sales. Any unauthorized discounts would still be subject to the royalty fee. Franchisees should seek clarity on the approval process for discounts to ensure compliance and accurate royalty payments.