For Better Blend, are sales taxes included in the definition of 'Sales'?

According to Better Blend's 2024 Franchise Disclosure Document, 'Sales' is defined as the total revenue from the sale of goods or services before any discounts. Importantly, this definition explicitly excludes sales taxes. It also excludes revenue from the sale of gift cards, although it does include revenue from the redemption of gift cards. Additionally, gratuities collected on behalf of employees are not included in the calculation of 'Sales'.

For a prospective Better Blend franchisee, this definition is crucial for understanding the financial performance representations provided in Item 19 of the FDD. When reviewing the financial data for the company-owned locations, it's important to recognize that the reported sales figures do not include sales taxes. This ensures a consistent basis for comparison and analysis of revenue generation across different locations.

Understanding what constitutes 'Sales' is also essential for calculating royalty fees and other financial obligations to Better Blend. Since royalty fees are typically based on a percentage of gross sales, the exclusion of sales taxes means that franchisees will not be paying royalties on these amounts. This can have a positive impact on the franchisee's profitability, as it reduces the overall cost of operating the franchise.

In summary, Better Blend's clear definition of 'Sales' provides transparency and helps franchisees accurately assess their financial performance and obligations. By excluding sales taxes, gift card sales (but including redemptions), and gratuities, Better Blend ensures a consistent and fair basis for calculating revenue and associated fees.