Does Card My Yard include sales tax in its reported revenues?
Card_My_Yard Franchise · 2025 FDDAnswer from 2025 FDD Document
"Gross Sales" is the total selling price of all services and products and all income of every other kind and nature related to the Card My Yard business, whether for cash or credit and regardless of collection in the case of credit. "Gross Sales" includes all proceeds from the sale of coupons and gift cards/certificates. However, when those coupons or gift cards/certificates are redeemed, you are not required to count the retail value of the services provided upon redemption in determining Gross Sales for royalty purposes or for other fees calculated in respect of Gross Sales, except that if you fail to record and report sales proceeds for royalty purposes when a coupon or gift card/certificate is sold, or if coupons or gift cards/certificates are distributed free of charge without our written consent, then you will be required to pay us royalties based on the retail value of the services provided in exchange for the coupon or gift card/certificate. "Gross Sales" does notinclude (i)salestaxes collected from customers of the Card My Yard business; (ii) tips or gratuities paid directly to your employees by customers of the Card My Yard business or paid to you and turned over by you to your employees in lieu of direct tips or gratuities; (iii) rush fees paid to the Card My Yard business; (iv) delivery fees paid to the Card My Yard business; (v) returns to shippers or manufacturers; and (vi) proceeds from isolated sales of trade fixtures not constituting any part of the products and services offered for sale at
Source: Item 23 — RECEIPTS (FDD pages 84–259)
What This Means (2025 FDD)
According to Card My Yard's 2025 Franchise Disclosure Document, Gross Sales do not include sales taxes collected from customers. Gross Sales are defined as the total selling price of all services and products and all income of every other kind and nature related to the Card My Yard business, whether for cash or credit and regardless of collection in the case of credit. Gross Sales includes all proceeds from the sale of coupons and gift cards/certificates. However, when those coupons or gift cards/certificates are redeemed, the franchisee is not required to count the retail value of the services provided upon redemption in determining Gross Sales for royalty purposes or for other fees calculated in respect of Gross Sales.
This means that Card My Yard franchisees will not pay royalties on sales tax collected. This is a benefit to the franchisee because it reduces the amount of revenue subject to royalty fees. Franchisees are responsible for collecting and remitting sales taxes to the appropriate taxing authorities, except for sales taxes paid to the applicable taxing authorities by Card My Yard.
Card My Yard requires franchisees to maintain accurate records of sales, including sales tax records and returns, in accordance with generally accepted accounting principles. Franchisees must also provide copies of their state sales tax returns to Card My Yard within five days after the end of each calendar quarter. Card My Yard has the right to audit these records and can charge the franchisee for the costs of the audit if an understatement of 2% or more is discovered.