What is excluded from the calculation of 'Net Sales' for a Buff City Soap BCS Makery?
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, the calculation of 'Net Sales' for a BCS Makery excludes specific items. Net Sales is defined as the total selling price of all services and products, and all income related to the Makery, whether paid in cash, cash equivalents, or credit. Proceeds from the sale of coupons, gift cards, gift certificates, or vouchers are included when they are redeemed at the Makery.
However, certain items are specifically excluded from the Net Sales calculation. These exclusions include complimentary products and services, provided that the total value of these complimentary items does not exceed 2% of Net Sales for the applicable week. Additionally, tips and gratuities received by employees are excluded from Net Sales. Sums collected and actually paid by a Makery for any sales or other excise tax imposed by a government authority are also excluded.
For promotional discounts implemented by Buff City Soap, the amount actually paid by the customer after the discount is considered Net Sales, rather than the original price. Net Sales also includes proceeds from any business interruption insurance applicable to each BCS Makery. Understanding these inclusions and exclusions is important for franchisees as Net Sales figures are used to calculate royalties and assess the financial performance of the business.