According to the Buildingstars franchise agreement, when are Gross Sales calculated?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
- D. "Gross Sales" 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 Sales 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 22 — CONTRACTS (FDD page 43)
What This Means (2025 FDD)
According to Buildingstars' 2025 Franchise Disclosure Document, Gross Sales are calculated when the services or products are delivered or rendered. Gross Sales are 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 because Buildingstars calculates royalty fees based on a percentage of Gross Sales. The franchisee needs to understand what constitutes a Gross Sale and when it is recognized to accurately calculate and report these fees.
The definition does exclude applicable sales, use, or service taxes, as well as any refunds and allowances actually given to customers, which is a common practice in franchising to avoid franchisees paying royalties on amounts they did not actually retain. This ensures that the royalty fees are based on the net revenue received by the franchisee from the Business.