What is excluded from Gross Sales when calculating the Royalty fee for a Floyds 99 franchise?
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 the 2025 Floyds 99 Franchise Disclosure Document, the royalty fee is 6% of Gross Sales. Gross Sales include all revenue from the Barbershop, including sales made away from the Barbershop premises. However, Floyds 99 excludes sales taxes and discounts that have been approved by them in advance from the Gross Sales calculation.
For a prospective franchisee, this means that while all revenue generated by the barbershop contributes to the Gross Sales figure, they do not have to pay a royalty on sales taxes collected or discounts that Floyds 99 has pre-approved. This can reduce the overall royalty burden, as these amounts are subtracted before the royalty percentage is applied.
It is important for franchisees to maintain accurate records of sales taxes collected and discounts given, and to ensure that all discounts are pre-approved by Floyds 99 to ensure accurate royalty calculations. This policy is fairly standard in franchising, as sales taxes are pass-through funds and discounts are often part of promotional strategies.