For an Aplus franchise, are chargebacks deducted from Gross Sales?

According to Aplus's 2024 Franchise Disclosure Document, chargebacks are not deducted from gross sales. Gross sales for an Aplus franchise encompass the total income received from sales within the franchised business, including merchandise, services, equipment rentals, and any merchandise inventory variation. This calculation is made without deducting costs such as the cost of goods sold, materials, labor, interest, or transportation.

Gross sales also include the full retail value of goods and services exchanged in barter transactions. Additionally, any proceeds from business interruption insurance and payments received from vendors are included in the gross sales calculation.

For a prospective Aplus franchisee, this means that royalty fees and other payments to Aplus will be based on a higher revenue figure, as chargebacks are not subtracted. This could impact the franchisee's profitability, as they pay fees on revenue they may not ultimately retain due to chargebacks. It is important for potential franchisees to understand how chargebacks typically affect their business and factor this into their financial projections.