Are discounts included in the 'Gross Sales' calculation for a Bombs Away business?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
, techniques, designs, layouts, operating procedures, customer data, information and know-how.
- "Gross Sales" means the total dollar amount of all sales generated through the Business for a given period, including, but not limited to, payment for any services or products sold by Franchisee, whether for cash or credit. Gross Sales does not include (i) bona fide refunds to customers, (ii) sales taxes collected by Franchisee, (iii) sales of used equipment not in the ordinary course of
business, or (iv) sales of prepaid cards or similar products (but the redemption of any such card or product will be included in Gross Sales).
Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 31–33)
What This Means (2024 FDD)
According to Bombs Away's 2024 Franchise Disclosure Document, the definition of 'Gross Sales' does not include discounts. Specifically, Gross Sales is defined as the total dollar amount of all sales generated through the Business, including payments for services or products sold, whether for cash or credit.
However, the definition explicitly excludes certain items from the Gross Sales calculation. These exclusions are bona fide refunds to customers, sales taxes collected by the franchisee, sales of used equipment not in the ordinary course of business, and sales of prepaid cards or similar products (though the redemption of such cards is included).
Furthermore, the financial performance representation for January 1, 2023, to December 31, 2023, notes that 'Gross Sales' means the total of all collected revenue in a period, not including discounts, taxes, tips/gratuity, or voids. This clarification reinforces that discounts are not factored into the Gross Sales figure reported by Bombs Away franchisees. This is a fairly standard practice in franchising, as it gives a clearer picture of actual revenue before any reductions.