Where can I find the definition of 'Gross Receipts' related to the Amerispec Inspection Services franchise?
Amerispec_Inspection_Services Franchise · 2025 FDDAnswer from 2025 FDD Document
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- "Gross Receipts" means the total amount of revenues received by you 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 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 you, or your designee, in consideration for goods and services provided in, from, or in conjunction with the Franchised Business. "Gross Receipts" exclude (i) bona fide refunds, (ii) credits given or allowed by you to customers, (iii) uncollectible checks, and (iv) amounts collected from customers and remitted by you to any governmental taxing authority in satisfaction of sales taxes.
Source: Item 6 — Other Fees (FDD pages 14–18)
What This Means (2025 FDD)
According to Amerispec Inspection Services's 2025 Franchise Disclosure Document, the definition of "Gross Receipts" can be found in the notes to Item 6, which discusses Other Fees. Specifically, Note 2 defines "Gross Receipts" as the total revenue received by the franchisee or their affiliates from all products and services offered by the Franchised Business, including those sold under the Amerispec Inspection Services marks or using branded systems. This includes payments received in cash or credit, plus the fair market value of goods and services provided to the franchisee in exchange for goods and services related to the Franchised Business.
However, the definition also specifies certain exclusions from "Gross Receipts." These exclusions include bona fide refunds, credits given to customers, uncollectible checks, and amounts collected from customers and remitted to governmental taxing authorities for sales taxes. This distinction is important because the royalty and advertising contribution fees that Amerispec Inspection Services franchisees pay are calculated as a percentage of Gross Receipts.
Understanding what constitutes "Gross Receipts" is crucial for franchisees to accurately calculate and report their monthly fees. The FDD also outlines the process for reporting and paying these fees, including the use of electronic funds transfer and the consequences of underreporting or failing to report Gross Receipts. Amerispec Inspection Services has the right to debit the franchisee's account if Gross Receipts are not reported or if underreporting is detected, which could lead to financial penalties and interest charges.