Is the redemption of prepaid cards included in Gross Sales for a Fly To Fit franchise?
Fly_To_Fit Franchise · 2024 FDDAnswer from 2024 FDD Document
systems, formulas, techniques, designs, layouts, operating procedures, customer data, information and know-how.
- "Gross Sales" means the total dollar amount of all sales generated through the Business for a given period, including, but not limited to, payment for any services or products sold by Franchisee, whether for cash or credit. Gross Sales does not include (i) bona fide refunds to customers, (ii) sales taxes collected by Franchisee, (iii) sales of used equipment not in the ordinary course of
business, or (iv) sales of prepaid cards or similar
Source: Item 22 — CONTRACTS (FDD page 44)
What This Means (2024 FDD)
According to Fly To Fit's 2024 Franchise Disclosure Document, the redemption of prepaid cards or similar products is included when calculating Gross Sales. Gross Sales are used to calculate royalty fees and marketing contributions.
Gross Sales for a Fly To Fit franchise are defined as the total dollar amount of all sales generated through the Business for a given period, including payment for any services or products sold by the Franchisee, whether for cash or credit. However, Gross Sales does not include bona fide refunds to customers, sales taxes collected by the Franchisee, sales of used equipment not in the ordinary course of business, or sales of prepaid cards or similar products.
This means that while the initial sale of a prepaid card is excluded from Gross Sales, the revenue recognized when a customer uses that card to pay for Fly To Fit's services or products is included in the Gross Sales calculation. This distinction is important for franchisees to understand, as it affects the amount of royalty fees and marketing contributions they will owe to Fly To Fit.