According to the Buildingstars franchise agreement, when is Gross Revenue calculated?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
For purposes of this Agreement, the following terms shall have the meaning as set forth below and the definitions constitute an integral part of this Agreement:
- D. "Gross Revenue" means the total money or property earned by FRANCHISEE or derived from or in connection with the operation of the Business, including all fees and other charges for every type of service performed and goods and services sold. Gross Revenue will be calculated at the time the services or products from which they were derived are delivered or rendered. The term does not include applicable sales, use or service taxes and any refunds and allowances actually given to Customers.
Source: Item 23 — RECEIPT (FDD pages 43–217)
What This Means (2025 FDD)
According to Buildingstars's 2025 Franchise Disclosure Document, Gross Revenue is calculated when the services or products from which they were derived are delivered or rendered. Gross Revenue is defined as the total money or property earned by the franchisee or derived from the operation of the business, including all fees and other charges for every type of service performed and goods and services sold.
This definition is important for Buildingstars franchisees because the royalty fee, management fee, administration fee, and insurance program fee are all calculated as a percentage of Gross Revenue. Specifically, the franchisee pays a monthly royalty fee equal to 10% of Gross Revenue, a monthly management fee equal to 20% of Gross Revenue, a monthly administration fee equal to 5% of Gross Revenue, and a monthly insurance program fee equal to 3.5% of Gross Revenue.
The FDD specifies that Gross Revenue does not include applicable sales, use, or service taxes, and any refunds and allowances actually given to customers. This clarification ensures that franchisees are not paying fees on amounts that are collected for tax purposes or refunded to customers. Buildingstars withholds these fees from the amount of billings Buildingstars collects for the franchisee.