What sales tax receipts can be deducted from Gross Revenues for an Apricot Lane franchise?
Apricot_Lane Franchise · 2025 FDDAnswer from 2025 FDD Document
There will be deducted from Gross Revenues for purposes of said computation (but only to the extent they have been included) the amount of all sales tax receipts or similar tax receipts which, by law, are chargeable to customers, if such taxes are separately stated when the customer is charged and if such taxes are paid to the appropriate taxing authority. There will be further deducted from Gross Revenues the amount of any documented refunds, charge backs, credits and allowances given in good faith to customers by FRANCHISEE.
Source: Item 23 — RECEIPTS (FDD pages 51–222)
What This Means (2025 FDD)
According to Apricot Lane's 2025 Franchise Disclosure Document, franchisees can deduct certain sales tax receipts from their gross revenues. Specifically, the amount of all sales tax receipts or similar tax receipts which, by law, are chargeable to customers can be deducted.
However, there are conditions that must be met for these deductions to be valid. First, the taxes must be separately stated when the customer is charged. Second, these taxes must be paid to the appropriate taxing authority. If these conditions are not met, the sales tax receipts cannot be deducted from the gross revenues when calculating royalties and other fees owed to Apricot Lane.
In addition to sales tax receipts, Apricot Lane franchisees can also deduct the amount of any documented refunds, charge backs, credits, and allowances given in good faith to customers. This provides some financial relief for franchisees who have to process returns or offer discounts. It is important to maintain accurate documentation of these deductions to ensure compliance with the franchise agreement.