factual

Does the definition of Gross Revenue for Fly Fitness include revenue from the sale of merchandise?

Fly_Fitness Franchise · 2024 FDD

Answer from 2024 FDD Document

You must pay us a Continuing Royalty Fee equal to seven percent (7.0%) of the Gross Revenue generated weekly by your Franchised Business. "Gross Revenue" includes all revenues and income from any source derived or received by Franchisee from, through, by or on account of the operation

of the Franchised Business or made pursuant to the rights granted hereunder, including but not limited, any and all other revenues received using Franchisor's methods, operations and/or trade secrets whether received in cash, in services, in kind, from barter and/or exchange, on credit (whether or not payment is actually received) or otherwise. It does not include (i) any sales tax or similar taxes collected from customers and turned over to the governmental authority imposing the tax, (ii) properly documented refunds to customers, (iii) properly documented promotional discounts (i.e., coupons) or (iv) properly documented employee discounts (limited to 3% of Gross Revenue). Gross Revenue does not include gift card purchases, at the time of purchase, but Gross Revenue does include the redemption amount of purchases made by gift card. If you do not report revenues for the month, then we will collect 120% of the last Continuing Royalty Fee collected and settle the balance the next period in which you report revenue. You are required to set up authorization at your bank to allow us to electronically transfer funds from your bank account to our bank account. Interest and late fees will apply to any late payments or electronic funds transfer requests denied due to insufficient funds.

Source: Item 6 — OTHER FEES (FDD pages 8–14)

What This Means (2024 FDD)

According to Fly Fitness's 2024 Franchise Disclosure Document, gross revenue includes all income from any source related to the operation of the franchised business. This includes all revenues received using Fly Fitness's methods, operations, and/or trade secrets, whether received in cash, services, or credit. This definition would include revenue from the sale of merchandise.

However, the definition of Gross Revenue for Fly Fitness does not include sales tax collected from customers and turned over to the government, refunds to customers, promotional discounts (i.e., coupons), or employee discounts (limited to 3% of Gross Revenue). Also excluded from gross revenue are gift card purchases at the time of purchase, but the redemption amount of purchases made by gift card is included.

The franchisee is required to pay a Continuing Royalty Fee equal to 7% of the Gross Revenue generated weekly by their Franchised Business. This fee is payable weekly on Wednesday for Gross Revenue of the prior week (Monday through Sunday).

If a franchisee does not report revenues for the month, Fly Fitness will collect 120% of the last Continuing Royalty Fee collected and settle the balance the next period in which the franchisee reports revenue. Franchisees are required to authorize Fly Fitness to electronically transfer funds from their bank account.

Disclaimer: This information is extracted from the 2024 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.