For Augusta Lawn Care, are documented chargebacks deducted from Gross Revenues?
Augusta_Lawn_Care Franchise · 2025 FDDAnswer from 2025 FDD Document
As used in the Franchise Agreement, "Gross Revenues" means the total selling price of all services and products sold at or from your Augusta Lawn Care Business (not adjusted for credit card fees), including the full value of any gift certificate redeemed at your Augusta Lawn Care or coupon sold for use at your Augusta Lawn Care (fees retained by or paid to third-party sellers of such gift certificates or coupons are not excluded from calculation), and all income and revenue of every other kind and nature related to the Augusta Lawn Care operation, whether for cash or credit, but excluding taxes collected from customers and paid to taxing authority, and reduced by the amount of any documented refunds, credits, allowances, and chargebacks the Business in good faith gives to customers.
Source: Item 6 — OTHER FEES (FDD pages 12–14)
What This Means (2025 FDD)
According to Augusta Lawn Care's 2025 Franchise Disclosure Document, documented chargebacks are deducted from gross revenues. The FDD specifies that "Gross Revenues" for an Augusta Lawn Care franchise is calculated by taking the total selling price of all services and products, including the full value of redeemed gift certificates or coupons. This total is then reduced by the amount of any documented refunds, credits, allowances, and chargebacks that the business, in good faith, gives to customers. Taxes collected from customers and paid to a taxing authority are also excluded from gross revenues.
This definition of Gross Revenues is important because it directly impacts the royalty fees that Augusta Lawn Care franchisees pay. By deducting chargebacks, refunds, credits, and allowances from the total revenue, the base amount on which royalties are calculated is lowered. This can result in lower royalty payments for the franchisee, as they are not paying a percentage on revenue that was ultimately returned to the customer or used to offset costs.
It is important for prospective franchisees to understand exactly what documentation is required to prove a refund, credit, allowance, or chargeback. The FDD specifies that these deductions must be "documented" and given to customers "in good faith," so franchisees should clarify with Augusta Lawn Care what constitutes acceptable documentation and what procedures must be followed to ensure these deductions are properly accounted for. Understanding these details will help franchisees accurately calculate their gross revenues and, consequently, their royalty obligations.