Does the definition of Gross Revenue for a 1-800-GOT-JUNK? franchise include sales made via credit?
1_800_Got_Junk Franchise · 2025 FDDAnswer from 2025 FDD Document
Gross Revenue is defined in the Franchise Agreement to mean “the entire amount of the sale price, whether for cash, credit, payment in kind (valued at fair market value) or otherwise, of all sales from or in connection with the operation of the Franchised Business (including, but not limited to, the sale of any Services or products from or in connection with the operation of the Franchised Business). No deductions shall be allowed from Gross Revenue except for the following: (a) sums collected by or on behalf of Franchisee for any duly constituted governmental authority on account of sales taxes, good and services taxes or other taxes imposed directly upon the sale of goods or services (or both) from the Franchised Business, provided that the amount of any such tax has in fact been paid or otherwise accounted for by Franchisee to the appropriate governmental authority; (b) the amount of any refund or credit given in respect of any services or products provided to a customer of the Franchised Business for which a refund of the whole or part of the purchase price is made or for which a credit is given as long as such refund or credit is given in 4899-8658-3815.1
accordance with Franchisor’s policies and procedures in relation to refunds set out in the Operations Manual; (c) amounts for uncollected or uncollectable credit accounts as long as such credit accounts are deemed uncollected or uncollectable in accordance with Franchisor’s policies and procedures in relation to uncollected or uncollectable credit accounts set out in the Operations Manual; and (d) amounts uncollected for a customer of the Franchised Business due to discount coupons that were approved for use in advance by Franchisor.
Source: Item 6 — Other Fees (FDD pages 11–17)
What This Means (2025 FDD)
According to 1-800-GOT-JUNK?'s 2025 Franchise Disclosure Document, Gross Revenue includes the entire amount of the sale price, regardless of whether it's cash, credit, or payment in kind. This means that 1-800-GOT-JUNK? franchisees must calculate their royalty and other fees based on all sales, including those made on credit.
There are a few exceptions to what is included in Gross Revenue. Franchisees can deduct sums collected for governmental sales taxes, refunds or credits given to customers according to 1-800-GOT-JUNK?'s policies, amounts for uncollected credit accounts deemed uncollectible per 1-800-GOT-JUNK?'s policies, and amounts uncollected due to approved discount coupons. Additionally, any sales assumed to have been lost due to business interruption, which an insurer has paid business interruption insurance on, must also be included in Gross Revenue.
This definition of Gross Revenue is important for prospective franchisees to understand, as it directly impacts the amount of royalties and other fees they will owe to 1-800-GOT-JUNK?. Franchisees should familiarize themselves with 1-800-GOT-JUNK?'s policies and procedures regarding refunds, uncollected credit accounts, and discount coupons to ensure they are accurately calculating their Gross Revenue and paying the correct amount of fees. Understanding these deductions can help manage financial obligations and maintain accurate reporting.