What revenue is included in the "Gross Sales" calculation for Annex Brands franchises?
Annex_Brands Franchise · 2025 FDDAnswer from 2025 FDD Document
- "Gross Sales" include all revenue for products and services sold to customers, including products and services with higher margins such as shipping services (including ground, next day, freight and custom packaging), faxes, copies and metered postage, and products and services with lower margins such as postage stamps, but exclude: (i) sales, use or service taxes collected and paid to appropriate taxing authorities; (ii) customer refunds and adjustments; (iii) the cost of electronic funds transfers for resale; (iv) the cost of money orders for resale; (v) utility funds collected; (vi) the cost of lottery tickets for resale and phone cards for resale; (vii) the cost of 3rd party truck rental sales; (viii) the cost of eBay sales; and (ix) the cost of ancillary fees paid to the appropriate government agencies to process fingerprinting, LiveScan and passports.
Our franchisees pay royalty fees and marketing fees based on Gross Receipts (defined in Item 6), which are calculated by excluding the cost of metered postage and postage stamps from Gross Sales.
Both Gross Sales and Gross Receipts include fees and commissions generated from electronic funds transfers, money order sales, utility collections, lottery ticket sales, phone card sales, 3rd party truck rental sales, fingerprinting, LiveScan, passport services, and eBay sales.
We reserve the right periodically, in our sole discretion, to add additional exclusions to the list above as new programs, products or services are established, or as changes to existing programs, products or services are established, as specified by us in our Manuals, in writing or otherwise.
Source: Item 19 — Financial Performance Representations (FDD pages 74–78)
What This Means (2025 FDD)
According to Annex Brands' 2025 Franchise Disclosure Document, "Gross Sales" include all revenue from products and services sold to customers. This encompasses both higher-margin items like shipping services (including ground, next day, freight, and custom packaging), faxes, copies, and metered postage, as well as lower-margin items such as postage stamps. Additionally, fees and commissions from electronic funds transfers, money order sales, utility collections, lottery ticket sales, phone card sales, 3rd party truck rental sales, fingerprinting, LiveScan, passport services, and eBay sales are included in Gross Sales.
However, certain items are excluded from the Gross Sales calculation. These exclusions include sales, use, or service taxes collected and paid to taxing authorities, customer refunds and adjustments, the cost of electronic funds transfers for resale, the cost of money orders for resale, utility funds collected, the cost of lottery tickets and phone cards for resale, the cost of 3rd party truck rental sales, the cost of eBay sales, and the cost of ancillary fees paid to government agencies for processing fingerprinting, LiveScan, and passports.
It is important to note that Annex Brands retains the right to add further exclusions to the Gross Sales calculation as new programs, products, or services are introduced or as changes are made to existing ones. These changes will be specified in the Annex Brands manuals or in writing. Franchisees should also be aware that royalty and marketing fees are based on Gross Receipts, which are calculated by excluding the cost of metered postage and postage stamps from Gross Sales. Therefore, while these items are included in Gross Sales, they are not factored into the calculation of royalty and marketing fees.