What is included in the Bor Restoration definition of 'Gross Sales'?
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, "Gross Sales" encompasses all revenue and income a franchisee actually receives from operating their business. This includes 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 in kind, through barter or exchange, on credit, or by other means.
However, Bor Restoration specifies that certain items are deducted from Gross Sales before calculating royalties or other fees. These deductions are limited to sales tax or similar taxes that the franchisee is legally obligated to collect from clients on behalf of a taxing authority. Notably, the definition explicitly states that there are no deductions for documented discounts, refunds, or credits issued to clients.
It's important to note that the Gross Sales figures presented in Item 19 of the FDD do not reflect deductions for royalties, technology fees, or other fees paid to Bor Restoration, nor do they account for costs of goods, employment costs, rent, or other general and administrative expenses. A prospective franchisee needs to consider these expenses when evaluating the financial performance representations provided, as these costs will significantly impact their net income. Bor Restoration will provide written substantiation of the data used in preparing these data upon reasonable request.