How does a Pump It Up franchisee transmit the Royalty fee?
Pump_It_Up Franchise · 2025 FDDAnswer from 2025 FDD Document
cute a voluntary termination agreement and general release with us (See Exhibit E to the Franchise Disclosure Document).
(3) if you are an honorably discharged United States military veteran, we will discount the Initial Franchise Fee for your first Franchised Business by 25%.
B. Ongoing Royalty Fee. You agree to pay us a nonrefundable and continuing royalty fee for the right to use the System and the Marks (the "Royalty") in the amount of 6% of the Gross Revenues of the Franchised Business. You must transmit the Royalty to us in the manner we specify in the Manuals (which may include, as provided for in Section 7.B. an automatic, electronic debit of funds).
C. Definition of "Gross Revenues". As used in this Agreement, the term "Gross Revenues" means all revenue that you derive from operating the Franchised Business, including, but not limited to, all services and products sold, all video game machine and vending machine proceeds and all amounts that you receive at or away from the Premises, and whether from cash, check, credit and debit card, barter, exchange, trade credit, third-party coupon partners, or other credit transactions. Gross Revenues will exclude: (i) 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; and (ii) any documented contributions (up to a maximum amount set by us) you make to an approved not-for-profit organization in conjunction with a PIU-approved charitable event.
D. Advertising Contributions and Expenses.
Source: Item 23 — RECEIPTS (FDD pages 60–225)
What This Means (2025 FDD)
According to Pump It Up's 2025 Franchise Disclosure Document, the Royalty fee, which is 6% of the Gross Revenues of the Franchised Business, must be transmitted in the manner specified in the manuals. This may include an automatic, electronic debit of funds.
Gross Revenues are defined as all revenue derived from operating the franchised business, including revenue from services, products, video game machines, vending machines, and amounts received from various payment methods like cash, check, credit/debit cards, and other credit transactions. Gross Revenues exclude sales, use, or service taxes collected from customers and remitted to taxing authorities, and documented refunds, credits, allowances, and charge-backs provided to customers in good faith. They also exclude documented contributions to approved non-profit organizations in conjunction with a Pump It Up-approved charitable event, up to a maximum amount set by Pump It Up.
Pump It Up may also electronically debit the franchisee's business checking account automatically for any late payment fee. The FDD states that a late report fee of $75 may be charged for each day that any payment required by Section 7 is late. Franchisees should consult the manuals for the most up-to-date and specific instructions on royalty fee transmission methods.