What is included in the definition of 'Gross Revenues' for a Healthsource Chiropractic clinic when calculating the Management Fee?
Healthsource_Chiropractic Franchise · 2025 FDDAnswer from 2025 FDD Document
- 5.1 In consideration for Management Company's performance of the Management Company Services and the grant of the licenses and sub-license set forth in Section 4, Licensed Provider hereby agrees to pay Management Company a management fee (herein called the "Management Fee"), which shall be the amount equal to the Gross Revenues of the Clinic Management Business remaining after subtracting costs associated with Licensed Provider's salary and fringe benefits (and, if applicable, the Clinic's employees' salary and wages and fringe benefits) as approved by Management Company, the Clinic's payroll taxes and other withholding items, and any other Clinic operating costs incurred by the Clinic in accordance with this Agreement.
- (a) As used herein "Gross Revenues" shall mean the total of all revenue and receipts derived from the operation of the Clinic, including all amounts received at or away from the site of the Clinic or through the business the Clinic conducts (such as fees for Clinical Services, fees for the sale of any other services, gift certificate sales, and revenue derived from products sales, whether paid in cash or by check, credit card, or debit card, or other credit transactions); and excludes only sales taxes collected from patients and paid to the appropriate taxing authority, and any patient refunds and credits the Clinic actually makes.
Source: Item 23 — Receipts (FDD pages 77–282)
What This Means (2025 FDD)
According to Healthsource Chiropractic's 2025 Franchise Disclosure Document, Gross Revenues for the purpose of calculating the Management Fee includes the total of all revenue and receipts derived from the operation of the clinic. This encompasses all amounts received at or away from the clinic site, or through the business the clinic conducts. Specifically, this includes fees for Clinical Services, fees for the sale of any other services, gift certificate sales, and revenue derived from product sales. These revenues are included whether they are paid in cash, check, credit card, debit card, or other credit transactions.
However, there are some exclusions from the Gross Revenues calculation. Sales taxes collected from patients and paid to the appropriate taxing authority are excluded. Additionally, any patient refunds and credits that the Healthsource Chiropractic clinic actually makes are also excluded from the Gross Revenues calculation.
For a prospective Healthsource Chiropractic franchisee, understanding this definition is crucial because the Management Fee is directly calculated from Gross Revenues after subtracting certain costs. Accurately tracking and reporting all sources of revenue, while properly accounting for sales taxes and patient refunds, will ensure correct calculation and payment of the Management Fee. This also highlights the importance of maintaining accurate financial records and adhering to the franchisor's reporting requirements.