Are sales taxes included in the calculation of 'Gross Sales' for a Bee Organized franchise?
Bee_Organized Franchise · 2025 FDDAnswer from 2025 FDD Document
Note 3: Gross Sales – "Gross Sales" means the total dollar sales from all business and clients of your Bee Organized Business and includes the total gross amount of revenues, receipts, and sales from whatever source derived, whether in form of cash, credit, agreements to pay or other consideration including the actual retail value of any goods or services traded, borrowed, or received by you in exchange for any form of non-money consideration (whether or not payment is received at the time of the sale), from or derived by you or any other person or Corporate Entity from business conducted or which started in, on, from or through your Bee Organized Business and/or your Operating Territory, whether such business is conducted in compliance with or in violation of the terms of the Franchise Agreement. Gross Sales include the total gross amount of revenues, receipts, and sales from whatever source derived from and/or derived by you including, any person and/or Corporate Entity acting on your behalf, from business conducted within and/or outside your Operating Territory that is related to your Bee Organized Business and/or a competitive business located and/or operated within your Operating Territory, outside your Operating Territory, and/or otherwise. Gross Sales do not include (a) sales taxes that you collect and remit to the proper taxing authority; and (b) authorized promotional discounts that you provide to clients.
Source: Item 6 — OTHER FEES (FDD pages 12–16)
What This Means (2025 FDD)
According to Bee Organized's 2025 Franchise Disclosure Document, sales taxes are not included in the calculation of Gross Sales. Gross Sales are defined as the total dollar sales from all business and clients of your Bee Organized Business and includes the total gross amount of revenues, receipts, and sales from whatever source derived. This includes revenues from cash, credit, agreements to pay, or other consideration, including the actual retail value of any goods or services traded, borrowed, or received in exchange for any form of non-money consideration. Gross Sales also include revenues derived from business conducted within or outside the Operating Territory that is related to your Bee Organized Business or a competitive business.
However, the FDD specifically states that Gross Sales do not include sales taxes that you collect and remit to the proper taxing authority. Additionally, authorized promotional discounts that you provide to clients are also excluded from Gross Sales. This definition is important because several fees payable to Bee Organized, such as the Royalty Fee (8% of Gross Sales or a minimum monthly amount) and the Brand Development Fund Fee (2% or 1% of Gross Sales depending on annual sales volume), are calculated based on Gross Sales.
For a prospective franchisee, this means that when calculating the revenue on which royalties and other fees are based, you can deduct the amount of sales tax collected from customers and remitted to the government. This exclusion reduces the amount of fees owed to Bee Organized. It is a common practice in franchising to exclude sales taxes from gross sales calculations, as the franchisee is merely acting as a collection agent for the taxing authorities and the sales taxes do not represent revenue to the business.