How often are Pump It Up brand fund fees collected from franchisees?
Pump_It_Up Franchise · 2025 FDDAnswer from 2025 FDD Document
The Company collects brand fund fees, as stipulated in the franchise agreement, currently equal to a flat fee or 2% of gross sales over the term of the franchise agreement. Brand fund fees are sales-based that are related entirely to the Company's performance obligation under the franchise agreement and are recognized as franchisee store level sales occur. Brand fund fees are collected weekly or monthly as stipulated in the franchise agreement.
Source: Item 23 — RECEIPTS (FDD pages 60–225)
What This Means (2025 FDD)
According to Pump It Up's 2025 Franchise Disclosure Document, brand fund fees are collected either weekly or monthly. The specific collection frequency is determined by the stipulations outlined in the franchise agreement. These fees are calculated as either a flat fee or 2% of gross sales over the term of the franchise agreement.
These brand fund fees are sales-based and directly tied to Pump It Up's performance obligations under the franchise agreement. As such, the revenue recognition for these fees occurs as franchisee store-level sales are made. This means that the fees are not collected upfront but rather in correlation with the ongoing sales activity of the franchise.
For a prospective Pump It Up franchisee, it's crucial to review the franchise agreement carefully to understand whether the brand fund fees will be collected weekly or monthly. This will impact the franchisee's cash flow management and financial planning. Understanding the collection schedule, along with the fee structure (flat fee vs. percentage of gross sales), is essential for accurate financial forecasting and budgeting.