What sales taxes are excluded from Azal Coffee's Gross Sales calculation?
Azal_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
You must submit to us a complete statement of Gross Sales and other information specified by us for the reporting periods and on the forms specified by us. You must provide us with copies of all sales or similar tax returns, annual income tax returns, monthly profit and loss statements, monthly balance sheets, monthly inventory statements and annual financial statements.
Source: Item 22 — CONTRACTS (FDD page 51)
What This Means (2024 FDD)
Based on the 2024 Azal Coffee Franchise Disclosure Document, the document does not specify which sales taxes are excluded from the gross sales calculation. The FDD does mention that franchisees must submit a complete statement of Gross Sales and copies of all sales or similar tax returns to Azal Coffee.
This means that while Azal Coffee requires franchisees to report gross sales, the FDD does not provide a clear definition of what constitutes gross sales or which taxes, if any, can be deducted from revenue to arrive at gross sales. This lack of clarity could lead to inconsistencies in reporting among different franchisees, or potential disputes with Azal Coffee regarding the calculation of royalties or other fees based on gross sales.
A prospective Azal Coffee franchisee should seek clarification from the franchisor regarding the precise definition of "Gross Sales" and specifically inquire about which, if any, sales taxes are excluded from the calculation. Understanding this definition is crucial for accurate financial reporting and for forecasting potential revenue and expenses.