What constitutes 'Gross Revenues' for a Zoomin Groomin franchise royalty calculation?

According to Zoomin Groomin's 2025 Franchise Disclosure Document, the royalty fee is calculated as 8% of Gross Revenues, subject to a minimum weekly royalty fee of $125. Gross Revenues are defined as the total of all receipts, whether in cash, credit, checks, bitcoin, or other means of exchange, net of any tax, adjustments, credits, and allowances actually made in accordance with the Operations Manual. Zoomin Groomin requires franchisees to provide a Gross Revenue report by 5:00 p.m. every Tuesday for the prior week's activity, with the week ending on Saturday at midnight. Zoomin Groomin also reserves the right to access the franchisee's computer system to download sales information.

This definition of Gross Revenues is important for prospective franchisees because it directly impacts the amount of royalty fees owed to Zoomin Groomin. Franchisees need to understand what constitutes a 'receipt' and what deductions are allowed when calculating Gross Revenues. The inclusion of various payment methods like cash, credit, checks, and even bitcoin ensures that all forms of revenue are accounted for. The deduction of taxes, adjustments, credits, and allowances suggests that franchisees are not paying royalties on amounts that are not actually retained by the business.

The weekly reporting requirement and Zoomin Groomin's right to access the franchisee's computer system highlight the importance of accurate record-keeping. Franchisees must maintain detailed records of all transactions and ensure that their accounting practices align with the Operations Manual. The electronic funds transfer (EFT) system for royalty payments further streamlines the process, requiring franchisees to promptly notify Zoomin Groomin of any changes to their bank account information. Failing to report accurately or on time could lead to penalties or disputes with the franchisor.

In the franchise industry, defining Gross Revenue is a standard practice to ensure transparency and consistency in royalty calculations. Zoomin Groomin's comprehensive definition, which includes various payment methods and allows for certain deductions, is fairly typical. However, prospective franchisees should carefully review the Operations Manual to fully understand the specific types of adjustments, credits, and allowances that are permitted, as these can vary from franchise to franchise.