Are customer refunds excluded from the 'Gross Revenue' calculation for an All County franchise?

According to All County's 2025 Franchise Disclosure Document, customer refunds are excluded from the calculation of Gross Revenue. Gross Revenue is defined as the total revenue and other consideration from the Franchised Business, whether from cash, check, or credit transactions, including e-commerce transactions. However, this definition specifically excludes Maintenance Revenue, all federal, state, or municipal sales, use, or service taxes collected from customers and paid to the appropriate taxing authority, and customer refunds, adjustments, credits, and allowances actually made by the Franchised Business in compliance with All County's Methods of Operation.

This exclusion of customer refunds from Gross Revenue is beneficial for All County franchisees because it reduces the base upon which royalty fees are calculated. By not including refunds in the Gross Revenue figure, franchisees pay royalties on the net revenue they actually retain, rather than on the total amount before refunds. This can lead to lower royalty payments, especially in cases where a franchisee needs to issue a significant amount in refunds during a given period.

It is important to note that the exclusion of customer refunds, adjustments, credits, and allowances from Gross Revenue is contingent upon these actions being made in compliance with All County's Methods of Operation. Franchisees must adhere to the franchisor's guidelines when issuing refunds or other adjustments to ensure that these deductions are properly accounted for and do not lead to disputes with the franchisor. Franchisees should familiarize themselves with the specific procedures outlined in the Operations Manual to ensure compliance.

Prospective franchisees should seek clarification from All County regarding what constitutes an acceptable refund, adjustment, credit, or allowance under their Methods of Operation. Understanding these guidelines is crucial for accurately calculating Gross Revenue and avoiding potential conflicts with the franchisor over royalty payments. Additionally, franchisees should maintain detailed records of all refunds and adjustments issued to customers to support their Gross Revenue calculations during audits or reviews.