What is included in the definition of 'Gross Revenues' for a Pump It Up franchise?
Pump_It_Up Franchise · 2025 FDDAnswer from 2025 FDD Document
- (2) "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 providers or other credit transactions. Gross Revenues 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: (i) 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.
Source: Item 6 — OTHER FEES (FDD pages 15–21)
What This Means (2025 FDD)
According to Pump It Up's 2025 Franchise Disclosure Document, "Gross Revenues" encompasses all income derived from operating the franchised business. This includes revenue from all services and products sold, proceeds from video game and vending machines, and all amounts received, whether at the premises or elsewhere. The form of payment is irrelevant, as gross revenues include cash, checks, credit and debit cards, barter, exchange, trade credit, and transactions involving third-party coupon providers.
However, the definition of Gross Revenues for a Pump It Up franchise does allow for some exclusions. Specifically, all federal, state, or municipal sales, use, or service taxes collected from customers and remitted to the appropriate taxing authority are excluded from Gross Revenues. Additionally, documented refunds, credits, allowances, and charge-backs provided to customers in good faith are deductible. Franchisees can also deduct documented contributions to approved not-for-profit organizations made in conjunction with a Pump It Up-approved charitable event, up to a maximum amount set by the company.
Understanding what constitutes Gross Revenues is crucial for Pump It Up franchisees because several fees, including the royalty fee (6% of Gross Revenues) and the brand fund contribution (currently 2% of Gross Revenues), are calculated as a percentage of this figure. Accurate reporting of Gross Revenues is essential to avoid penalties or audits. Franchisees should carefully track all income and permitted deductions to ensure compliance with the franchise agreement.