For 1 800 Packouts franchisees, what is included in the definition of 'Gross Sales' for the Franchised Business?

According to 1 800 Packouts's 2025 Franchise Disclosure Document, "Gross Sales" is defined as all revenue generated by the Franchised Business. This includes all sales of products and services to customers. However, certain taxes are excluded from the calculation of Gross Sales.

Specifically, excise taxes, sales and use taxes, and gross receipts taxes are excluded from Gross Sales, provided these taxes are separately stated when the customer is charged. This means that 1 800 Packouts franchisees will calculate their royalty and marketing fees based on their total revenue, less any of the aforementioned taxes that are clearly itemized on customer invoices.

This definition of Gross Sales is important because it directly impacts the amount of Royalty Fees (7% of Gross Sales) and Marketing Fees (3% of Gross Sales) that a 1 800 Packouts franchisee must pay. By excluding certain taxes from the calculation, the franchisee's fees are based on the actual revenue retained by the business, rather than the total amount collected from customers.