Are sales taxes included in the Gross Sales calculation for a Canine Dimensions franchise?
Canine_Dimensions Franchise · 2025 FDDAnswer from 2025 FDD Document
"Gross Sales" means all revenue from the performance of services in association with the Franchised Business, whether for cash or credit and regardless of collection in the case of cash and regardless of collection in the case of credit, and income of every kind and nature related to the Franchised Business. Gross Sales does not include any sales taxes or other taxes collected from clients by Franchisee for transmittal to the appropriate taxing authority. Gross Sales will not include any cash refunds given to, or coupons used by, Franchisee's clients, so long as Franchisor approved of any such coupons prior to their issuance or use by Franchisee.
Source: Item 22 — CONTRACTS (FDD page 36)
What This Means (2025 FDD)
According to Canine Dimensions' 2025 Franchise Disclosure Document, gross sales do not include sales taxes. Gross Sales for a Canine Dimensions franchise encompasses all revenue generated from services related to the Franchised Business, whether collected in cash or credit, and includes all income related to the business. However, the definition explicitly excludes any sales taxes collected from clients that the franchisee then remits to the appropriate taxing authority.
This means that when calculating royalties or other fees based on gross sales, a Canine Dimensions franchisee will not include the amount of sales taxes they collect. This is a common practice in franchising, as franchisees act as collection agents for these taxes, which are then passed on to the government.
Additionally, the definition of Gross Sales for Canine Dimensions also excludes any cash refunds given to clients or coupons used by clients, provided that the franchisor approved these coupons before their use. This ensures that franchisees are not penalized for discounts or refunds that are part of an approved promotional strategy.