Are ATM income from fees, commissions, and rentals included in Gross Sales for an Aplus franchise?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
The following are not included in Gross Sales: (a) gasoline, diesel, and other fuel sales (if applicable, when operating a fueling station), (b) the amount of tax imposed by the United States or any city, county, state, or other governmental entity or agency or instrumentality thereof upon or with respect to retail sales of tangible personal property measured by a stated percentage of sales price or gross receipts, whether imposed upon you as a seller or upon the customer as a purchaser; (c) any deposits refunded to customers; (d) the sale price of returned merchandise by customers when the full sale price is refunded either in cash or credit, but this exclusion shall not apply in any instance when the customer, in order to obtain the refund, is required to purchase other property at a price equal to or greater than the amount charged for the property which is returned. For purposes of calculating Gross Sales, refund or credit of the entire amount shall be deemed to be given when the purchase price, less re-handling and restocking costs, is refunded or credited to the customer; (e) lottery and other commissions; (f) money orders (face value); (g) ATM income from fees, commissions, and rentals; (h) money order fees; (i) prepaid product sales and commissions on products from designated supplier; (j) federal, state and local excise taxes on cigarettes. For purposes of this excise tax exclusion, the calculation and deduction of the above taxes shall be calculated based on the tax rate that is in effect on the first day of the month, and is only applicable to cigarette products that are authorized as a part of the APLUS cigarette planograms; (k) car wash and automotive repairs; and (l) proprietary SUNOCO food service businesses and convenience store product offerings from which no royalty is collected in accordance with the terms of the applicable participation agreement.
Source: Item 6 — OTHER FEES (FDD pages 16–28)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, ATM income from fees, commissions, and rentals are specifically included when calculating Gross Sales. This means that the total revenue Aplus franchisees generate from ATM operations within their stores, encompassing all fees, commissions, and rental income, contributes to their overall Gross Sales figure. Gross Sales is a critical metric because Aplus uses it to calculate royalty fees.
For a prospective Aplus franchisee, this inclusion has a direct financial impact. Since royalty fees for Captive Market Locations are up to 15% of Gross Sales, the more ATM revenue generated, the higher the royalty payment to Aplus. However, the FDD also states that the royalty fee will be the difference between the actual monthly Royalty Fee paid and up to $2,000. Therefore, franchisees should carefully consider the potential ATM revenue and factor it into their financial projections, understanding that it will increase their royalty obligations.
It's also important to note what is NOT included in Gross Sales. According to the FDD, gasoline, diesel, and other fuel sales, sales tax, customer deposits refunded, sale price of returned merchandise, lottery and other commissions, money orders (face value), money order fees, prepaid product sales and commissions on products from designated supplier, federal, state and local excise taxes on cigarettes, car wash and automotive repairs, and proprietary SUNOCO food service businesses and convenience store product offerings from which no royalty is collected in accordance with the terms of the applicable participation agreement are not included in Gross Sales. Understanding these inclusions and exclusions is essential for accurate financial management and royalty reporting for Aplus franchisees.