What is excluded from the definition of 'Gross Revenues' when calculating the Beehive Homes franchise royalty?
Beehive_Homes Franchise · 2025 FDDAnswer from 2025 FDD Document
For purposes of determining the Franchise Royalty, "Gross Revenues" is defined to be the gross receipts of every kind and nature whatsoever received by Franchisee directly or indirectly in connection with the operation of the franchised business, the Home and/or providing of services, excepting only the amount of sales or use taxes levied upon the sale of goods or services by a governmental taxing authority and actually paid to said taxing authority.
Source: Item 23 — RECEIPTS (FDD pages 34–123)
What This Means (2025 FDD)
According to Beehive Homes' 2025 Franchise Disclosure Document, the franchise royalty is based on Gross Revenues, which are defined as the gross receipts of every kind and nature received by the franchisee directly or indirectly in connection with the operation of the franchised business, the Home, and/or providing of services.
However, there is one specific exclusion from the calculation of Gross Revenues for Beehive Homes franchisees. The amount of sales or use taxes levied upon the sale of goods or services by a governmental taxing authority and actually paid to said taxing authority is excluded from the gross revenues used to calculate the 5% royalty fee.
This means that franchisees do not have to pay a royalty on the portion of their revenue that is collected as sales tax and remitted to the government. This is a common practice in franchising, as the royalty is intended to be based on the franchisee's actual revenue, not on taxes collected on behalf of the government.