Are sales of equipment deductible from Gross Revenue for Amorino?
Amorino Franchise · 2025 FDDAnswer from 2025 FDD Document
performed at the Franchised Location or elsewhere, and all other income of every kind and nature related to the Franchised Business, less any authorized discounts (collectively, "Gross Revenue"). Revenue collected from customers in the form of sales tax, federal, state, county, or city taxes, excise tax, or other similar tax collected from customers that you owe to governmental entities must be reported to us, but is excluded from Gross Revenue for the purpose of computing the royalty fee. In addition to taxes, as described in the previous sentence, the following may also be deducted from Gross Revenue: (a) The selling price of any goods returned by customers or the price charged for any services provided to customers to the extent you give any credit, discount, refund or similar allowance but an exchange of merchandise does not result in an exclusion except to the extent of any accompanying credit, discount, refund or other allowance given to the customer; (b) Items returned to their source for credit or other allowance; (c) Amounts or credits received on claims for loss or damage to merchandise or other assets of your Amorino store but not for claims for loss of business under your business interruption insurance; (d) Sales of equipment, trade fixtures or similar property not constituting merchandise of your store; (e) Transfers of merchandise to or from other Amorino facilities when those transfers are made only for the convenient operation of the concerned facilities; (f) gift certificates or similar vouchers until they are redeemed at your store. You agree to pay the Advertising Fee on a monthly basis, within 10 days of the end of each month during the term of this Agreement, with the first Advertising Fee payment due ten days after the first month (full or partial) that your Store is open.
Source: Item 22 — CONTRACTS (FDD pages 80–81)
What This Means (2025 FDD)
According to Amorino's 2025 Franchise Disclosure Document, the sales of equipment, trade fixtures, or similar property not constituting merchandise of the store can be deducted from Gross Revenue when calculating royalty fees. This means that Amorino franchisees do not have to pay a percentage of their revenue from these specific types of sales to Amorino.
This deduction directly affects the amount of royalty fees an Amorino franchisee will owe. By excluding revenue from equipment sales, the franchisee's Gross Revenue is lower, resulting in lower royalty payments to Amorino. This can be particularly beneficial during periods when a franchisee may be upgrading or replacing equipment, as these sales would not be subject to royalty fees.
It is important to note the specific types of sales that qualify for this deduction. The quote specifies "equipment, trade fixtures or similar property not constituting merchandise of your store." This indicates that the deduction applies to items that are not part of the regular inventory sold to customers. Franchisees should maintain accurate records of these sales to ensure proper calculation of Gross Revenue and royalty fee payments. Franchisees should seek clarification from Amorino regarding what specifically constitutes 'equipment, trade fixtures or similar property' to ensure compliance and avoid potential disputes.