How are promotional or discount coupons treated in the 'Gross Revenue' calculation for a Beauty Bungalows franchise?

According to Beauty Bungalows's 2025 Franchise Disclosure Document, the calculation of 'Gross Revenue' excludes promotional or discount coupons under specific conditions. Gross Revenue for a Beauty Bungalows franchise is defined as the total income from gross sales and receipts, regardless of whether the income is received in cash, credit, checks, services, property, or other forms of exchange.

However, the definition explicitly excludes "promotional or discount coupons to the extent that Franchisee realizes no income". This means that if a Beauty Bungalows franchisee accepts a coupon and does not receive any monetary compensation for the value of that coupon, the value of the coupon is not included in the gross revenue calculation. This exclusion directly impacts the royalty fees and other financial obligations that are calculated as a percentage of gross revenue, potentially lowering these costs for the franchisee.

This exclusion provides a financial benefit to the franchisee, as it reduces the base upon which royalties and other fees are calculated. It also incentivizes the use of promotional coupons as a marketing tool, since the franchisee is not penalized for offering discounts to customers. Franchisees should keep accurate records of all coupons redeemed and the corresponding reduction in income to ensure accurate reporting of gross revenue and to substantiate any deductions taken.