Are sales taxes included in the calculation of 'Net Revenues' for a Bambu franchise?

According to Bambu's 2025 Franchise Disclosure Document, sales taxes are explicitly excluded from the calculation of 'Net Revenues.' The FDD defines 'Net Revenues' as the total gross revenue derived from the operation of the Bambu shoppe, whether from cash or credit sales, and includes sales of both merchandise and services. However, this total excludes all sales taxes, use taxes, gross receipts taxes, and other similar taxes that are added to the sales price and collected from customers. Additionally, any bona fide refunds, rebates, and discounts are subtracted from the gross revenue to arrive at the 'Net Revenues' figure.

This definition is important for prospective franchisees because the Royalty Fee that Bambu collects is based on a percentage of Net Revenues. By excluding sales taxes and similar taxes from the calculation, franchisees are not paying a royalty on money that is simply being collected on behalf of the government. This exclusion ensures that the royalty is based on the actual revenue generated by the Bambu shoppe's sales.

Furthermore, the deduction of refunds, rebates, and discounts from gross revenue provides a more accurate reflection of the actual income earned by the franchise. This approach is fairly standard in the franchise industry, as it aligns the royalty payments with the franchisee's true earnings, promoting a fairer and more transparent relationship between the franchisor and franchisee.