How does Buff City Soap define 'Net Sales' for BCS Makeries?
Buff_City_Soap Franchise · 2025 FDDAnswer from 2025 FDD Document
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- "Net Sales" is defined as the total selling price of all services and products and all income of every kind and nature related to each BCS Makery, whether for cash, cash equivalents, or credit, and regardless of collection in the case of credit. Proceeds from the sale of coupons, gift cards, gift certificates or vouchers is included in Net Sales when and at the Makery from which the coupons, gift cards, gift certificates or vouchers are eventually redeemed. Net Sales exclude the following: complimentary products and services (provided that the aggregate amount of such products and services does not exceed 2% of Net Sales for the applicable week), tips and gratuities, and sums collected and actually paid by a Makery for any sales or other excise tax imposed by any duly constituted government authority. In the case of promotional discounts implemented by us at the BCS Makery, the amount actually paid by the guest after the discount, rather than the original amount, will be considered for purposes of the term Net Sales. Net Sales also includes the proceeds of any business interruption insurance applicable to each BCS Makery.
Source: Item 19 — Financial Performance Representations (FDD pages 59–63)
What This Means (2025 FDD)
According to Buff City Soap's 2025 Franchise Disclosure Document, "Net Sales" for BCS Makeries encompasses the total selling price of all services and products, along with all income related to the Makery, whether received in cash, cash equivalents, or credit. Even if payment hasn't been collected for credit sales, it's still included in net sales. Proceeds from the sale of coupons, gift cards, gift certificates, or vouchers are included when they are redeemed at the Makery.
However, the definition also specifies exclusions. Complimentary products and services are excluded, provided they don't exceed 2% of Net Sales for the applicable week. Tips and gratuities are also excluded, as are sums collected for sales or excise taxes paid to government authorities. For promotional discounts implemented by Buff City Soap, the net amount paid by the customer after the discount is considered the Net Sales amount.
Finally, Net Sales also include proceeds from any business interruption insurance applicable to the Makery. This comprehensive definition provides clarity for franchisees in calculating their revenue and understanding the basis for royalty payments and financial reporting.