For Bombs Away, are taxes included in the calculation of 'Gross Sales'?
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 t
Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 31–33)
What This Means (2024 FDD)
According to Bombs Away's 2024 Franchise Disclosure Document, sales taxes collected by the franchisee are not included in the calculation of Gross Sales. Gross Sales for Bombs Away is 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 Franchisee, whether for cash or credit.
Specifically, Gross Sales does not include bona fide refunds to customers, sales taxes collected by the franchisee, 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.
This definition is important because many of the franchisee's financial obligations to Bombs Away, such as royalty fees and marketing fund contributions, are calculated as a percentage of Gross Sales. By excluding sales taxes from the Gross Sales calculation, Bombs Away ensures that franchisees are not paying fees on money that is simply being passed through to tax authorities. This is a fairly standard practice in franchising, as it provides a more accurate reflection of the franchisee's actual revenue.