What is included in the definition of 'Gross Sales' for a Card My Yard franchise?
Card_My_Yard Franchise · 2025 FDDAnswer from 2025 FDD Document
(2) "Gross Sales" is the total selling price of all services and products and all income of every other kind and nature related to your 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 not include (i) sales taxes 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 (so long as such tips or gratuities have been clearly marked as such); (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 the Card My Yard business or having any material effect upon the ongoing operation of the Card My Yard business.
Source: Item 6 — OTHER FEES (FDD pages 15–23)
What This Means (2025 FDD)
According to Card My Yard's 2025 Franchise Disclosure Document, "Gross Sales" encompasses the total selling price of all services and products, along with all income of any kind related to the Card My Yard business. This includes both cash and credit transactions, regardless of whether the credit has been collected. Gross Sales also 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.
However, the definition of "Gross Sales" for a Card My Yard franchise specifically excludes several items. These exclusions include sales taxes collected from customers, tips or gratuities paid directly to employees or turned over to them in lieu of direct tips (provided they are clearly marked as such), rush fees, and delivery fees. Additionally, returns to shippers or manufacturers are excluded, as are proceeds from isolated sales of trade fixtures that do not constitute part of the products and services offered and do not materially affect the ongoing operation of the business.
For a prospective Card My Yard franchisee, understanding this definition is crucial because it directly impacts the calculation of royalty payments and other fees. Accurately tracking and reporting Gross Sales, while also accounting for the allowable exclusions, is essential for compliance with the franchise agreement and for managing the financial aspects of the business. Failure to properly report sales, especially regarding coupons and gift cards, can result in additional royalty obligations based on the retail value of services provided.