Are voids 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 calculation of 'Gross Sales' does not include voids. The FDD defines 'Gross Sales' 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. However, Gross Sales specifically excludes bona fide refunds to customers, sales taxes collected by Franchisee, sales of used equipment not in the ordinary course of business, and sales of prepaid cards or similar products (although the redemption of such cards or products will be included).
This definition is important for Bombs Away franchisees because the royalty fees and marketing fund contributions are calculated based on a percentage of Gross Sales. By excluding voids from the Gross Sales calculation, Bombs Away ensures that franchisees are not paying royalties or marketing fees on transactions that were not actually completed or resulted in revenue. This can help to lower the amount a franchisee owes to Bombs Away.
In Item 19, which shows the 1/01/2023 – 12/31/2023 financial results, the notes define Gross Sales as the total of all collected revenue in a period, not including discounts, taxes, tips/gratuity, or voids. This definition is consistent with the definition in Article 1, further clarifying that voids are indeed excluded from the Gross Sales calculation for royalty and marketing fee purposes.