What is excluded from the Average Gross Revenue calculation for a Pump It Up franchise?
Pump_It_Up Franchise · 2025 FDDAnswer from 2025 FDD Document
(1) The Average Gross Revenue reflects all revenue derived from operating the Pump It Up business, including, but not limited to, all services and products sold, all video game machine and vending machine proceeds, and all amounts that are received at or away from the Premises, whether from cash, check, credit and debit card, barter, exchange, trade credit, or other credit transactions. The Average Gross Revenue excludes all federal, state, or municipal sales, use, or service taxes collected from customers and paid to the appropriate taxing authority and will be reduced by the amount of any documented refunds, credits, allowances, and charge-backs provided to customers in good faith.
Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 50–55)
What This Means (2025 FDD)
According to Pump It Up's 2025 Franchise Disclosure Document, the Average Gross Revenue calculation includes all revenue derived from operating the Pump It Up business. This encompasses revenue from all services and products sold, proceeds from video game and vending machines, and all amounts received at or away from the premises, regardless of the form of payment (cash, check, credit/debit card, barter, etc.).
However, there are specific exclusions from this calculation. Pump It Up excludes all federal, state, or municipal sales, use, or service taxes collected from customers and then paid to the appropriate taxing authority. Additionally, the Average Gross Revenue is reduced by the amount of any documented refunds, credits, allowances, and charge-backs provided to customers in good faith.
These exclusions provide a more accurate representation of the actual revenue retained by the Pump It Up franchisee, as they remove amounts that are collected on behalf of other entities (taxes) or returned to customers (refunds, credits, etc.). This is a fairly standard practice in franchise financial reporting, as it focuses on the revenue that the franchisee actually keeps and can use to cover expenses and generate profit.