How often must a Pump It Up franchisee transmit the royalty fee to the franchisor?
Pump_It_Up Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Source: Item 23 — RECEIPTS (FDD pages 60–225)
What This Means (2025 FDD)
According to Pump It Up's 2025 Franchise Disclosure Document, franchisees must pay a continuing royalty fee of 6% of Gross Revenues. The FDD specifies that the franchisee must transmit the royalty fee to Pump It Up in the manner specified in the manuals. This may include an automatic, electronic debit of funds, as provided for in Section 7.B of the franchise agreement.
Gross Revenues are defined as all revenue derived from operating the Pump It Up franchise, including revenue from services, products, video game machines, vending machines, and amounts received at or away from the premises. This includes revenue from cash, check, credit and debit card, barter, exchange, trade credit, third-party coupon partners, or other credit transactions.
Gross Revenues exclude sales, use, or service taxes collected from customers and paid to the appropriate taxing authority. Gross revenues are also reduced by the amount of any documented refunds, credits, allowances, and charge-backs provided to customers in good faith, as well as any documented contributions (up to a maximum amount set by Pump It Up) to an approved not-for-profit organization in conjunction with a Pump It Up-approved charitable event.
It is important for prospective Pump It Up franchisees to review the manuals to understand the specific methods and frequency for transmitting royalty fees to ensure compliance and avoid potential penalties, such as late payment fees.