What is included in the definition of 'Gross Sales' for a Bombs Away business?

According to Bombs Away's 2024 Franchise Disclosure Document, Gross Sales are defined as the total dollar amount of all sales generated through the Business for a given period. This includes payments for any services or products sold by the Franchisee, whether the payment is in cash or credit. This is a standard definition used by franchisors to calculate royalties and other fees.

However, the definition of Gross Sales for a Bombs Away franchise does not include certain items. Specifically excluded 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. However, the redemption of any such card or product will be included in Gross Sales.

It is important for a prospective Bombs Away franchisee to understand exactly what constitutes Gross Sales, as this figure is used to calculate royalty payments and other fees owed to the franchisor. Underreporting Gross Sales is a serious violation of the franchise agreement and can result in penalties or termination of the agreement. Franchisees should maintain accurate records and consult with a qualified accountant to ensure compliance with the reporting requirements.