How does Amerispec Inspection Services define 'Gross Receipts' for a franchisee?
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' 2025 Franchise Disclosure Document, Gross Receipts are defined as the total revenue amount received by the franchisee or their affiliates. This revenue comes from all products and services offered by the franchised business, including those sold under the AmeriSpec Inspection Services' Names and Marks, branded systems, software, or tools. This also includes services or products sold to customers of the franchised business, regardless of whether payment is made in cash or credit. Gross Receipts also include the fair market value of goods delivered and services rendered to the franchisee in consideration for goods and services provided in conjunction with the franchised business.
However, the definition of Gross Receipts for Amerispec Inspection Services excludes certain items. These exclusions include bona fide refunds, credits given to customers, uncollectible checks, and amounts collected from customers that are remitted to governmental taxing authorities for sales taxes. Additionally, revenues from businesses operated by the franchisee before the franchise agreement are excluded, provided these businesses were disclosed to Amerispec Inspection Services and a written amendment to the agreement was provided for the exclusion of such revenue.
This definition is important because royalties and advertising fees owed to Amerispec Inspection Services are typically calculated as a percentage of Gross Receipts. Franchisees should pay close attention to what is included and excluded from Gross Receipts, as an understatement of Gross Receipts can lead to audits, interest charges, and other penalties. Franchisees should also ensure that they properly document all exclusions, such as refunds and sales taxes, to avoid any disputes with Amerispec Inspection Services.