How does My Salon Suite define 'Gross Revenues' for the purpose of calculating Royalty Fees?
My_Salon_Suite Franchise · 2025 FDDAnswer from 2025 FDD Document
to increase payments over which we have control.
- (2) Gross Revenues. "Gross Revenues" includes all revenues from your sale of any services and products at or from the Center and all other revenues of every kind and nature related to operating the Center. Gross Sales does not include any sales tax or other taxes you collect from your customers and transmit to the appropriate taxing authority.
Under the Franchise Agreement, you will pay us a reduced Royalty Fee of 2.75% of Gross Sales for the first 6 months your new Center or Conversion Center is open for business. This reduction of the Royalty Fee is in place so you can invest additional money in the initial marketing plan during the first 6 months your Center or Conversion Center is open. The reduced Royalty Fee described in the preceding paragraph only applies to new Centers and Conversion Centers and it is not available to a franchisee that purchases a Resale Center.
Under the Franchise Agreement, beginning the 7th month through the 12th month you will pay us 5.5% of Gross Revenues. Beginning the 13th month you will pay us the greater of $1,000 or 5.5% of the new Center's or Conversion Center's Gross Revenues through the expiration date of the Franchise Agreement.
The Royalty Fee is due and payable through electronic transfer on or before the 10th day of the month following the month to which the Royalty Fee applies (unless the day is a holiday, in which case payment (electronic transfer) will be made on the next succeeding business day). You must provide us with the authorization for electronic transfer of the Royalty Fee before you open and commence operation of your Center. We may change the method of payment of the Royalty Fee from electronic transfer to any other method of payment as we deem appropriate at any time. A business day means any d
Source: Item 5 — Initial Fees (FDD pages 18–28)
What This Means (2025 FDD)
According to My Salon Suite's 2025 Franchise Disclosure Document, Gross Revenues are defined as all revenues from the sale of services and products at or from the center, including all other revenues related to operating the center. However, Gross Revenues do not include sales tax or other taxes that you collect from customers and then remit to the appropriate taxing authority.
My Salon Suite franchisees must pay a royalty fee based on Gross Revenues. For new centers or conversion centers, the royalty fee is 2.75% of Gross Revenues for the first 6 months of operation. This reduced rate is intended to allow franchisees to invest more in initial marketing efforts. From the 7th through the 12th month, the royalty fee increases to 5.5% of Gross Revenues. Starting in the 13th month, the royalty fee is the greater of $1,000 or 5.5% of Gross Revenues.
The royalty fee is due on or before the 10th day of the month following the month for which the fee applies, and payment must be made via electronic transfer. Franchisees must authorize electronic transfer of the royalty fee before opening their center. My Salon Suite retains the right to change the payment method from electronic transfer to any other method they deem appropriate at any time. Understanding what constitutes Gross Revenues is critical for franchisees to accurately calculate and pay their royalty fees, ensuring compliance with the franchise agreement.