What is the definition of 'Total Sales' for a Best In Class Education Center franchise?
Best_In_Class_Education_Center Franchise · 2025 FDDAnswer from 2025 FDD Document
r described in §22.2(a).
- "Affiliate Program" means any program or revenue-generating activity conducted at or in connection with your Center that is not a standard part of our System but is approved by us.
- "Affiliate Program Sales" means the total gross sums you collect from all Affiliate Programs conducted in connection with your Center. Affiliate Program Sales also include amounts that third-party marketing agencies, such as Groupon, receive and retain from your customers for marketing goods or services relating to your Affiliate Programs. Affiliate Program Sales excludes: (a) sales or use taxes you pay to a Governmental Authority; (b) revenue you collect and subsequently refund to a customer in a bona fide refund transaction; (c) Gross Sales; and (d) Special Program Sales.
- "After-School Program" means the optional educational program you may offer at your Center whereby students visit every day after school for at least two and one-half (2.5) hours per day and receive one (1) packet of Math and one (1) packet of English each week.
- "Alternative Channels of Distribution" means any channel of distribution other than retail sales made to students or their parents while present at a Center or Satellite Office, including, but not limited to: (a) the sale of educational products (such as educational DVDs, software programs, curriculum, tapes or books) through direct marketing (such as over the Internet or through catalogs or telemarketing) or from outlets other than a Center (such as retail stores, schools or other educational facilities);
Source: Item 6 — OTHER FEES (FDD pages 12–17)
What This Means (2025 FDD)
According to Best In Class Education Center's 2025 Franchise Disclosure Document, Total Sales is defined as the sum of Gross Sales, Affiliate Program Sales, and Special Program Sales. Gross Sales includes all gross sums collected from goods and services, including amounts third-party marketing agencies receive. Affiliate Program Sales are the gross sums collected from Affiliate Programs, excluding sales taxes, refunds, Gross Sales, and Special Program Sales. Special Program Sales are the gross sums from goods and services sold in connection with optional Special Programs, also excluding sales taxes, refunds, Gross Sales, and Affiliate Program Sales.
For a prospective Best In Class Education Center franchisee, understanding this definition is crucial because it forms the basis for calculating royalties and other fees payable to the franchisor. Franchisees must accurately track and report each of these sales categories to ensure compliance with the franchise agreement. The exclusions for sales taxes and refunds are beneficial as they reduce the base on which royalties are calculated.
The inclusion of amounts received by third-party marketing agencies like Groupon in Gross Sales, Affiliate Program Sales, and Special Program Sales means that franchisees must account for the total revenue generated through these channels, even if a portion is retained by the agency. This comprehensive definition ensures that all revenue streams are considered when calculating Total Sales.
Franchisees should pay close attention to the specific inclusions and exclusions within each sales category to avoid misreporting, which could lead to audits and potential penalties. Maintaining detailed records and seeking clarification from the franchisor on any ambiguous transactions is advisable for accurate reporting and compliance.