What sales are excluded from 'Gross Sales' calculations for a Fly To Fit franchise?

According to Fly To Fit's 2024 Franchise Disclosure Document, 'Gross Sales' for the purpose of calculating royalty fees and marketing contributions, means the total dollar amount of all sales generated through the Business for a given period, including payment for any services or products sold, whether for cash or credit. However, certain items are specifically excluded from this calculation.

The following are not included in the 'Gross Sales' calculation: (i) bona fide refunds to customers, (ii) sales taxes collected by the Franchisee, (iii) sales of used equipment not in the ordinary course of business, and (iv) sales of prepaid cards or similar products. However, the FDD specifies that when these prepaid cards or similar products are redeemed, that redemption value will be included in Gross Sales.

For a prospective Fly To Fit franchisee, understanding what constitutes 'Gross Sales' is crucial because it directly impacts the royalty fees and marketing contributions owed to Fly To Fit. By excluding items like sales taxes and customer refunds, the franchise agreement ensures that franchisees are not paying fees on money that is passed through or returned. The inclusion of prepaid card redemptions ensures that all revenue streams are accounted for when calculating fees.