What is included in the definition of 'Gross Revenues' for a Boulder Designs franchise?
Boulder_Designs Franchise · 2025 FDDAnswer from 2025 FDD Document
Note 4. "Gross Revenues" means the aggregate of all income and monthly fees Franchisee receives from customers for the purchase or provision of any goods or services, including enrollment fees, or any other person or business entity for the Franchised Business in connection with the Franchised Business (whether or not in accordance with the terms of the Franchise Agreement) and whether for check, cash, credit or otherwise, from the sale of products and services (including service charges in lieu of gratuity) regardless of the dollar amount Franchisee sells each product or service for, including, without limitation, all proceeds from any business interruption insurance and any revenue generated from National Accounts, but excluding (a) all insurance payments, check, cash, credit or debit card refunds made in good faith provided, prior to granting the refunds, the revenue related to the refunds was included in Gross Revenues, (b) any sales and equivalent taxes that Franchisee collects for or on behalf of and pay to any governmental taxing authority, and (c) any rebate Franchisee receives from a manufacturer or supplier.
Source: Item 6 — OTHER FEES (FDD pages 11–16)
What This Means (2025 FDD)
According to Boulder Designs' 2025 Franchise Disclosure Document, "Gross Revenues" encompasses all income and monthly fees a franchisee receives from customers for goods or services. This includes income from any source related to the franchised business, regardless of whether it aligns with the Franchise Agreement terms. Revenue sources include payments made via check, cash, credit, or other means, stemming from product and service sales, including service charges in place of gratuity, irrespective of the dollar amount for which the franchisee sells each product or service. Gross Revenues also include proceeds from business interruption insurance and revenue from National Accounts.
However, the definition of Gross Revenues for a Boulder Designs franchise excludes specific items. These exclusions include insurance payments, check, cash, credit or debit card refunds made in good faith (provided the revenue was initially included in Gross Revenues), sales and equivalent taxes collected and remitted to governmental taxing authorities, and rebates received from manufacturers or suppliers.
For a prospective Boulder Designs franchisee, understanding the precise definition of Gross Revenues is crucial because it directly impacts royalty fees and other payments to the franchisor. Accurately calculating and reporting Gross Revenues ensures compliance with the franchise agreement and avoids potential disputes or penalties. Franchisees should pay close attention to the inclusions and exclusions to maintain accurate financial records and fulfill their financial obligations to Boulder Designs.