What is excluded from 'Gross Revenues' when calculating royalties for a Canopy Lawn Care franchise?
Canopy_Lawn_Care Franchise · 2025 FDDAnswer from 2025 FDD Document
- (f) "Gross Revenues" means amounts derived from all products or services sold from or through your Lawn Care Business (across all Territories), including any sale of products or services made for cash or credit, or partly for cash and partly for credit. "Gross Revenues" also includes the fair market value of any services or products received by you in barter or in exchange for services and products.
Gross Revenues are deemed received by the franchisee at the time the services or products are delivered or at the time the sale takes place, whatever occurs first, regardless if final payment has actually been received by the franchisee.
There is no rollover credit for weeks in which the royalty amount exceeds the minimum.
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 you to the appropriate governmental authority; and
Source: Item 22 — CONTRACTS (FDD page 55)
What This Means (2025 FDD)
According to Canopy Lawn Care's 2025 Franchise Disclosure Document, Gross Revenues are used to calculate royalty fees and contributions to the Brand Fund. However, not all income is included in this calculation. Specifically, the following is excluded from gross revenues:
The amount of any tax imposed by a federal, state, municipal, or other governmental authority directly on sales and collected from customers is excluded from gross revenues. However, this exclusion is conditional. To qualify, the tax amount must be shown separately and actually paid by the franchisee to the appropriate governmental authority.
This exclusion benefits franchisees by reducing the base amount upon which royalty fees and Brand Fund contributions are calculated, potentially lowering these costs. Franchisees must ensure accurate record-keeping and proper remittance of sales taxes to take advantage of this exclusion.