Are sales taxes collected by the Bombs Away franchisee included in Gross Sales?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
- "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
Source: Item 22 — CONTRACTS (FDD pages 35–36)
What This Means (2024 FDD)
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, including payment for any services or products sold by the franchisee, whether for cash or credit. However, sales taxes collected by the Bombs Away franchisee are specifically excluded from Gross Sales.
This is a benefit to the franchisee because the royalty fee and marketing fund contribution are calculated as a percentage of Gross Sales. By excluding sales taxes from the Gross Sales calculation, Bombs Away franchisees do not have to pay a percentage of the sales taxes they collect to Bombs Away.
In addition to sales taxes, Gross Sales also do not include bona fide refunds to customers, sales of used equipment not in the ordinary course of business, or sales of prepaid cards or similar products. However, the redemption of any such card or product will be included in Gross Sales.