What items are excluded from the Gross Revenues calculation 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" encompass all income derived from the franchise's operations. This includes revenue from services, product sales, video and vending machines, and amounts received both on and off the premises, regardless of payment method (cash, credit, etc.).
However, the calculation of Gross Revenues for a Pump It Up franchise excludes certain items. Specifically, all federal, state, or municipal sales, use, or service taxes collected from customers and remitted to the appropriate taxing authority are excluded. Additionally, the Gross Revenues will be reduced by the amount of any documented refunds, credits, allowances, and charge-backs provided to customers in good faith. Finally, any documented contributions (up to a maximum amount set by Pump It Up) made to an approved not-for-profit organization in conjunction with a Pump It Up approved charitable event are also excluded from the Gross Revenues calculation.
These exclusions directly impact the royalty and brand fund contributions a franchisee pays, as these fees are calculated as a percentage of Gross Revenues. By excluding taxes, refunds, and charitable contributions, Pump It Up ensures that franchisees are not paying royalties on money that is either passed through to government entities, returned to customers, or donated to charity. This is a fairly standard practice in franchising, as it aligns the royalty fees with the actual revenue retained by the franchisee.