In the case of promotional discounts, how are Gross Sales calculated for a Bumper Man franchise?
Bumper_Man Franchise · 2025 FDDAnswer from 2025 FDD Document
"Gross Sales" means the total selling price of all Designated Services and all income of every other kind and nature related to the Bumper Business, whether for cash, cash equivalents, or credit, and regardless of collection in the case of credit. In the case of promotional discounts implemented by Franchisor and for which participation in the promotion is required of Franchisee, the amount actually paid by the customer after the discount for the Designated Services, rather than the original amount, will be considered for purposes of calculating Gross Sales. Gross Sales does not
- include amounts collected by Franchisee for performance of the Designated Services for an individual consumer on a single vehicle at the request of such consumer.
Source: Item 6 — OTHER FEES (FDD pages 12–15)
What This Means (2025 FDD)
According to Bumper Man's 2025 Franchise Disclosure Document, Gross Sales calculations consider the actual amount paid by the customer after a discount in the event of franchisor-implemented promotional discounts where franchisee participation is mandatory. This means that the royalty fees Bumper Man collects will be based on the discounted price, not the original price of the services.
This definition of Gross Sales is important for prospective franchisees because it directly impacts the amount of continuing service fees they will owe to Bumper Man. If a franchisee is required to participate in a promotional discount, their royalty will be based on the reduced revenue received during that promotion. This could be seen as beneficial to the franchisee, as it lowers the royalty burden during promotional periods, aligning the franchisee's costs with the reduced revenue.
It is also important to note that the Gross Sales calculation does not include amounts collected for services performed for an individual consumer on a single vehicle at the request of such consumer. This exclusion could impact the overall revenue considered for royalty calculations, potentially benefiting the franchisee by excluding certain revenue streams from the royalty calculation. Franchisees should ensure they understand which specific services are excluded from Gross Sales to accurately calculate their royalty obligations to Bumper Man.