Are sales taxes included in the Regular Gross Sales calculation for a Best Brains franchise?
Best_Brains Franchise · 2025 FDDAnswer from 2025 FDD Document
- (1) "Regular Gross Sales" means all sales or revenues (other than Additional Program Sales and Add-On Gross Sales), derived directly or indirectly from the Franchised Business, including on and off premises (e.g., E-Learning).
Regular Gross Sales also includes registration fees for any program and business interruption insurance proceeds.
Regular Gross Sales does not include:
(i) sales taxes collected from customers and paid to the appropriate taxing authority, and
(ii) the amount of all coupons redeemed at the Franchised Business (but only if the coupons have been previously approved by the Company as provided in this Agreement and only if such coupons have been included in Regular Gross Sales)
Source: Item 23 — RECEIPTS (FDD pages 42–190)
What This Means (2025 FDD)
According to Best Brains' 2025 Franchise Disclosure Document, sales taxes are not included in the calculation of Regular Gross Sales. The Regular Gross Sales figure is used to calculate the royalty fees owed to Best Brains. Regular Gross Sales includes all sales or revenues derived directly or indirectly from the franchised business, including registration fees for any program and business interruption insurance proceeds.
However, the FDD specifically states that sales taxes collected from customers and paid to the appropriate taxing authority are excluded from Regular Gross Sales. This means that Best Brains franchisees do not pay royalty fees on the sales tax they collect on behalf of the government.
Additionally, the amount of all coupons redeemed at the Franchised Business are not included in Regular Gross Sales, but only if the coupons have been previously approved by the Company and only if such coupons have been included in Regular Gross Sales.