What is the definition of 'Gross Revenues' for a My Salon Suite franchise, as it relates to the Royalty Fee?

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 any sales tax or other taxes that the franchisee collects from customers and transmits to the appropriate taxing authority. This definition is important because the Royalty Fee that franchisees pay to My Salon Suite is calculated as a percentage of Gross Revenues.

For new Centers or Conversion Centers, the Royalty Fee is 2.75% of Gross Revenues for the first 6 months of operation. 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. These fees are due on or before the 10th day of the month following the month to which the Royalty Fee applies, and My Salon Suite requires authorization for electronic transfer of the Royalty Fee before the Center opens.

Understanding what constitutes Gross Revenues is crucial for My Salon Suite franchisees to accurately calculate and pay their Royalty Fees. Franchisees should ensure they understand which revenues are included and excluded from this calculation to avoid any discrepancies or penalties. The reduced Royalty Fee for the first six months is designed to allow new franchisees to invest more in initial marketing, but this reduction does not apply to franchisees who purchase a Resale Center.