Are commissions included in the Gross Sales calculation for a 360 Painting franchise?
360_Painting Franchise · 2025 FDDAnswer from 2025 FDD Document
ing Fund Contribution periodically during the term of this Agreement, upon written notice to Franchisee.
- 4.4 Definition of Gross Sales. As used in this Agreement, "Gross Sales" means the total of all monies and receipts derived by Franchisee in connection with the Business, and from all other business using the Marks, whether evidenced by cash, credit, check, gift certificate, gift card, script or other property, or services, including (without limitation) all proceeds received from any business interruption insurance policy. Moreover, Gross Sales shall include all commissions, finder's fees, referral fees, construction management fees or other compensation received by Franchisee arising in any way from the operations of the Business. (For purposes of this paragraph, the term "Franchisee" includes its owners and officers as well as any business entity through which the Business is operated.) Gross Sales does not include (i) promotional allowances or rebates paid to Franchisee in connection with its purchase of products or supplies; (ii) sales, use, merchants' or other taxes measured on the basis of the gross revenues of the Business imposed by governmental authorities directly on sales or use and collected from customers, provided that the taxes are added to the selling price of Franchisee's goods and services and are in fact paid by Franchisee to the appropriate governmental authorities; or (iii) the value of any coupons duly issued and approved by Franchisor, or any bona fide discounts or customer refunds approved by Franchisor. For purposes of reporting Gross Sales, all revenues must be recorded upon receipt and any approved refunds to customers shall be deducted from revenues when the refund is tendered.
- 4.5 Estimated Gross Sales If Franchisee Does Not Report. If Franchisee fails to submit to Franchisor, by 12:00 p.m. Eastern Time on Tuesday of each week, a statement of Gross Sales for the prior week ending on Saturday (the "Business Week") as required by Section 6.3(i), then Franchisee will be assessed a $100 late charge per statement, per week, or part thereof, until each delinquent statement has been subm
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 56)
What This Means (2025 FDD)
According to the 2025 FDD, Gross Sales for a 360 Painting franchise includes all commissions, finder's fees, referral fees, construction management fees, or other compensation received by the franchisee arising from the operations of the business. This definition extends to the franchisee's owners and officers, as well as any business entity through which the business is operated.
However, the definition of Gross Sales for a 360 Painting franchise specifically excludes certain items. These exclusions include promotional allowances or rebates paid to the franchisee in connection with their purchase of products or supplies. It also excludes sales, use, merchants' or other taxes measured on the basis of the gross revenues of the business imposed by governmental authorities directly on sales or use and collected from customers, provided that these taxes are added to the selling price of the franchisee's goods and services and are in fact paid by the franchisee to the appropriate governmental authorities. Finally, the value of any coupons duly issued and approved by 360 Painting, or any bona fide discounts or customer refunds approved by 360 Painting are also excluded from Gross Sales.
For reporting purposes, all revenues must be recorded upon receipt, and any approved refunds to customers are deducted from revenues when the refund is tendered. Franchisees must submit a statement of Gross Sales for the prior week ending on Saturday by 12:00 p.m. Eastern Time on the following Tuesday. Failure to submit the statement on time results in a $100 late charge per statement, per week, or part thereof, until the statement is submitted. If a franchisee fails to submit a timely statement of Gross Sales, 360 Painting may estimate the amount of the franchisee's Gross Sales based on any information in its possession to calculate payments due under Sections 4 and 5 of the agreement. 360 Painting will not withhold its consent for reasonable extensions of time to submit a statement of Gross Sales.