What deductions are explicitly excluded from the Bor Restoration 'Gross Sales' calculation?
Bor_Restoration Franchise · 2024 FDDAnswer from 2024 FDD Document
"Gross Sales" means all revenue and income actually received by you from the operation of your Business, including all revenue received from Clients you directly bill, and also includes all revenue received from a Client's insurance carrier, late fees, revenue generated over the billed amount, and any other amount charged to Clients, whether received in cash, in services in kind, from barter or exchange, on credit or otherwise. Deducted from Gross Sales are all sales tax or similar taxes, which by law are chargeable to Clients by any taxing authority and are collected by you. There are no deductions because of any documented discounts, refunds, or credits.
Franchisees have not reported, and the above figures do not show deductions for royalties, technology fees, and other fees paid to us based on a percentage of Gross Sales or otherwise, costs of goods, employment costs, rent, or any other general or administrative expenses, all of which would be deducted from the Gross Sales described above. You should take this into account.
Source: Item 19 — Financial Performance Representations (FDD pages 35–36)
What This Means (2024 FDD)
According to Bor Restoration's 2024 Franchise Disclosure Document, the calculation of 'Gross Sales' includes all revenue and income received by a franchisee from their business operations. This encompasses revenue from clients they directly bill, payments from a client's insurance carrier, late fees, revenue exceeding the billed amount, and any other charges to clients, regardless of whether payment is received in cash, services, barter, credit, or other forms. The only deduction allowed from Gross Sales is for sales tax or similar taxes that are chargeable to clients by a taxing authority and collected by the franchisee.
The 2024 FDD explicitly states that documented discounts, refunds, or credits are not deducted from Gross Sales. Additionally, the financial figures presented do not reflect deductions for royalties, technology fees, or other fees paid to Bor Restoration based on a percentage of Gross Sales. The figures also do not account for costs of goods, employment costs, rent, or any other general or administrative expenses.
This definition of 'Gross Sales' is important for prospective franchisees because it forms the basis for calculating royalty payments and other fees owed to Bor Restoration. Franchisees need to be aware that their actual profit margin will be lower than what the 'Gross Sales' figure might suggest, as it does not account for various operating expenses. It is crucial for potential franchisees to carefully consider these factors and conduct their own due diligence to estimate their potential profitability accurately. Bor Restoration encourages prospective franchisees to investigate the costs and expenses they will incur while operating their franchised business.