How does Aerus define 'Gross Sales' for a Franchised Business, and are third-party delivery expenses deductible from Gross Sales?
Aerus Franchise · 2025 FDDAnswer from 2025 FDD Document
- X. "Gross Sales" The total selling price of all services and products and all income of every other kind and nature related to the Franchised Business (including, without limitation, the total selling price of the Consigned Products and income related to repair services, accessories and spare parts), whether for cash or credit and regardless of collection in the case of credit.
Under no circumstances shall Franchisee's expenses, including third party delivery expenses, be deducted from Gross Sales.
If a cash shortage occurs, the amount of Gross Sales shall be determined based on the records of the electronic cash register system or point-of-sale system and any cash shortage shall not be considered in the determination of Gross Sales.
Gross Sales shall, however, expressly exclude the following:
(1) Sums representing sales taxes collected directly from customers by Franchisee in the operation of the Franchised Business, and any sales, value added or other tax, excise or duty charged to customers which is levied or assessed against Franchisee by any Federal, state, municipal or local authority, based on sales of specific merchandise sold at or from the Franchised Business, provided that such taxes are actually transmitted to the appropriate taxing authority;
(2) The exchange of merchandise among Approved Locations, if more than one Approved Location is operated by Franchisee, where such exchanges are made solely for the convenient operation of the Franchised Business;
(3) Company-approved discounts and trade-ins for the purchase of Consigned Products only;
(4) Returns to shippers or manufacturers of any products returned to Franchisee by a retail customer, where the sale of such product by Franchisee was previously included in Gross Sales; and
(5) Proceeds from isolated sales of trade fixtures not constituting any part of the Products nor having any material effect upon the ongoing operation of the Franchised Business required under this Agreement.
Company may, from time to time, authorize certain other items to be excluded from Gross Sales. Any such permission may be revoked or withdrawn at any time in writing by Company at its option.
Source: Item 23 — Receipts (FDD pages 74–305)
What This Means (2025 FDD)
According to Aerus's 2025 Franchise Disclosure Document, Gross Sales for a franchised business is defined as the total selling price of all services and products, and all income of every kind related to the franchised business. This includes the total selling price of consigned products and income related to repair services, accessories, and spare parts, whether the sales are for cash or credit, and regardless of whether the credit is collected.
The FDD is very specific that under no circumstances can a franchisee's expenses, including third-party delivery expenses, be deducted from Gross Sales. This means that when calculating royalties or other payments based on revenue, an Aerus franchisee must include the full selling price without subtracting any expenses like delivery fees.
However, the definition of Gross Sales does expressly exclude certain items. These exclusions include sums representing sales taxes collected directly from customers, exchanges of merchandise among approved locations operated by the same franchisee, company-approved discounts and trade-ins for consigned products, returns to shippers or manufacturers of products returned by retail customers, and proceeds from isolated sales of trade fixtures not part of the products sold. Aerus retains the right to authorize additional exclusions from Gross Sales, but can revoke such permissions at any time in writing.