What sales taxes are excluded from the Gross Sales calculation for a Card My Yard franchise?
Card_My_Yard Franchise · 2025 FDDAnswer from 2025 FDD Document
"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 for royalty calculation purposes excludes sales taxes collected from customers. This means that when a Card My Yard franchisee calculates their royalty payments, they do not need to include the amount of sales tax they collected from customers in the Gross Sales figure. This benefits the franchisee by reducing the base amount on which royalties are calculated, leading to lower royalty payments.
In addition to sales taxes, the Gross Sales calculation for Card My Yard also excludes other items such as tips or gratuities paid directly to employees, rush fees, and delivery fees. These exclusions further reduce the royalty burden on the franchisee, as these revenues are not subject to royalty fees.
It is important for prospective Card My Yard franchisees to understand exactly what constitutes Gross Sales, as this figure is used to calculate not only royalty payments but also potentially other fees such as the Marketing Fund contribution, which is equal to the greater of (a) one-half of one percent (0.5%) of the Card My Yard business' monthly Gross Sales or (b) a set dollar amount that varies over time. Accurate record-keeping and reporting of sales and exclusions are essential for compliance with the franchise agreement.