What is included in Gross Sales for the purpose of 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 Floyds 99's 2025 Franchise Disclosure Document, the royalty fee is calculated as 6% of Gross Sales. Gross Sales include all revenue from the Barbershop, including sales made away from the Barbershop premises. However, Gross Sales do not include sales taxes and discounts that have been approved by Floyds 99 in advance.
This definition of Gross Sales is important for prospective franchisees because it directly impacts the amount of royalty fees they will owe to Floyds 99. By including all revenue from the Barbershop, even sales made off-site, Floyds 99 ensures that franchisees pay royalties on all income generated by the business.
However, the exclusion of sales taxes from Gross Sales is a benefit to franchisees, as they are not required to pay royalties on these amounts. Additionally, the exclusion of discounts that have been approved by Floyds 99 can also benefit franchisees, as it allows them to offer promotions and discounts without increasing their royalty obligations. Franchisees should ensure they obtain advance approval for discounts to ensure they are excluded from Gross Sales calculations. The royalties are to be paid via electronic transfer of funds on a day of the week that Floyds 99 designates, based on the prior week's Gross Sales.