What is subtracted from total revenue to calculate 'Gross Sales' for a Bigfoot Forestry business?

According to Bigfoot Forestry's 2025 Franchise Disclosure Document, Gross Sales is calculated by subtracting specific items from the total revenue generated by a Qualifying Outlet. The document defines 'Gross Sales' as the total revenue minus taxes and refunds. This calculation is important because it serves as the basis for determining other financial metrics and fees within the Bigfoot Forestry franchise system.

Gross Sales is a key figure because several fees, such as Brand Fund Fees and Royalty Fees, are calculated as a percentage of Gross Sales. For example, Brand Fund Fees are 1% of Gross Sales. Royalty Fees are calculated on a sliding scale based on Gross Sales brackets. Therefore, accurately determining Gross Sales directly impacts the amount a franchisee will pay in these ongoing fees.

The FDD also uses Gross Sales to determine the Local Marketing Commitment, which is the minimum amount a franchisee must spend on local marketing. This commitment is the greater of $1,000 per month ($12,000 per year) or 2% of Gross Sales. The financial performance representation in Item 19 of the FDD relies on Gross Sales to calculate various performance metrics, including EBITDA and Adjusted EBITDA, providing prospective franchisees with insight into potential earnings. Understanding how Gross Sales is calculated is crucial for franchisees to accurately forecast their financial obligations and potential profitability.