What customer refunds are excluded from 'Gross Revenues' for a Bumble Roofing franchise?
Bumble_Roofing Franchise · 2025 FDDAnswer from 2025 FDD Document
Gross Revenues do not include:
(i) the amount of any tax imposed by any federal, state, municipal or other governmental authority directly on sales and collected from customers, provided that the amount of any such tax is shown separately and in fact paid by Franchisee to the appropriate governmental authority; and
(ii) all customer refunds, valid discounts and coupons, and credits made by the Roofing Business (exclusions will not include any reductions for credit card user fees, financing program fees, returned checks or reserves for bad credit or doubtful accounts).
Source: Item 22 — CONTRACTS (FDD page 53)
What This Means (2025 FDD)
According to Bumble Roofing's 2025 Franchise Disclosure Document, when calculating 'Gross Revenues' for royalty payments and other financial reporting, franchisees must include all receipts from sales of products and services. However, certain deductions are allowed. Specifically, 'Gross Revenues' do not include the amount of any sales tax collected from customers and remitted to governmental authorities, provided the tax is shown separately.
Additionally, Bumble Roofing franchisees can deduct all customer refunds, valid discounts, and coupons from their gross revenues. However, the exclusions do not extend to reductions for credit card user fees, financing program fees, returned checks, or reserves for bad credit or doubtful accounts. This means that while franchisees can account for money actually returned to customers or given as discounts, they cannot reduce their reported revenue based on anticipated losses or the cost of payment processing.
This definition of 'Gross Revenues' is important because it directly impacts the royalties Bumble Roofing franchisees pay to the franchisor, as well as other financial obligations tied to revenue. Franchisees should carefully track all refunds, discounts, and sales taxes to ensure accurate reporting. They should also be aware that costs associated with payment processing and potential bad debts cannot be deducted from gross revenues.