What constitutes 'Gross Receipts' for an Amerispec Inspection Services franchise, and what is included in this calculation?
Amerispec_Inspection_Services Franchise · 2025 FDDAnswer from 2025 FDD Document
2.3 Gross Receipts shall mean the total amount of revenues received by the Franchisee or any affiliates from all products and services offered by the Franchised Business or offered from the premises of the Franchised Business, and all other services or products sold under the Names and Marks, or using any branded systems (including any branded software) or tools, or otherwise related to the Franchised Business or sold to customers of the Franchised Business, whether payment is received by cash or credit, plus the fair market value of goods delivered and services rendered to the Franchisee, or its designee, in consideration for goods and services provided in, from, or in conjunction with the Franchised Business. There shall be excluded from "Gross Receipts" bona fide refunds, credits given or allowed by the Franchisee to customers, uncollectible checks, and amounts collected from customers and remitted by the Franchisee to any governmental taxing authority in satisfaction of sales taxes. There shall also be excluded from Gross Receipts any revenues received from businesses operated by the Franchisee prior to the date of this Agreement at the premises of the Franchised Business, provided such existing businesses have been disclosed to the Company and Company has provided a written amendment to this Agreement for the exclusion of such revenue
Source: Item 23 — Receipts (FDD pages 47–172)
What This Means (2025 FDD)
According to Amerispec Inspection Services's 2025 Franchise Disclosure Document, Gross Receipts are defined as the total revenue received by the franchisee or their affiliates from all products and services offered by the franchised business. This includes revenues from services or products sold under the Amerispec Inspection Services brand name, branded systems (including software), or tools, and those related to or sold to customers of the franchised business. This calculation includes payments received in cash or credit. Gross receipts also include the fair market value of goods delivered and services rendered to the franchisee in exchange for goods and services provided by the franchise.
However, the definition of Gross Receipts for an Amerispec Inspection Services franchise also includes some exclusions. Bona fide refunds, credits given to customers, uncollectible checks, and sales taxes remitted to governmental taxing authorities are excluded from the calculation of Gross Receipts. Additionally, revenues from businesses operated by the franchisee at the premises before the franchise agreement are excluded, provided these businesses were disclosed to Amerispec Inspection Services and a written amendment to the agreement was made to exclude such revenue.
For a prospective Amerispec Inspection Services franchisee, understanding this definition is crucial for accurately calculating royalty payments and other financial obligations to the franchisor. It is important to note what revenue streams are included and excluded to ensure compliance with the franchise agreement. Franchisees should pay close attention to the conditions for excluding pre-existing business revenues, ensuring proper disclosure and documentation to avoid future disputes.