What is included in the calculation of 'Gross Revenue' for a Beauty Bungalows franchise?
Beauty_Bungalows Franchise · 2025 FDDAnswer from 2025 FDD Document
- 1.12 "Gross Revenue" means the total of all income derived from gross sales and gross receipts, whether the income is received by cash, credit, checks, services, property, or other means of exchange. "Gross Revenue" shall exclude only those sales taxes that Franchisee must by law collect from customers and that Franchisee pays to the government, promotional or discount coupons to the extent that Franchisee realizes no income, and employee or lessee receipt of services, if free, or any portion not paid for by an employee or studio lessee.
Source: Item 22 — CONTRACTS (FDD pages 47–48)
What This Means (2025 FDD)
According to Beauty Bungalows's 2025 Franchise Disclosure Document, "Gross Revenue" is defined as the total income a franchisee derives from gross sales and receipts. This encompasses all income, regardless of whether it's received in cash, credit, checks, services, property, or other forms of exchange. This is a standard definition used in many franchise agreements.
However, the calculation of Gross Revenue for a Beauty Bungalows franchise does allow for some exclusions. Specifically, franchisees are permitted to exclude sales taxes that they are legally obligated to collect from customers and remit to the government. Additionally, the value of promotional or discount coupons can be excluded, but only to the extent that the franchisee does not realize any income from them. Finally, the value of free services provided to employees or studio lessees, or any portion of services not paid for by them, can also be excluded from Gross Revenue.
Understanding what constitutes Gross Revenue is crucial for Beauty Bungalows franchisees because it directly impacts royalty payments and marketing contributions. Franchisees pay royalties and sometimes contribute to marketing cooperatives based on a percentage of their Gross Revenue. Therefore, accurately calculating and reporting Gross Revenue is essential for compliance with the franchise agreement and for maintaining a transparent financial relationship with Beauty Bungalows.