What is the definition of 'Gross Sales' for the purpose of calculating fees for a Chocolate Bash franchise?

According to Chocolate Bash's 2024 Franchise Disclosure Document, Gross Sales are defined as the total dollar amount of all sales generated through the business for a given period. This includes payments for any services or products sold by the franchisee, whether those payments are made in cash or via credit.

However, the definition of Gross Sales for a Chocolate Bash franchise specifically excludes certain items. These exclusions are (i) bona fide refunds to customers, (ii) sales taxes collected by the franchisee, (iii) sales of used equipment not in the ordinary course of business, and (iv) sales of prepaid cards or similar products. It is important to note that while the sale of prepaid cards is excluded, the redemption of any such card or product will be included in Gross Sales.

This definition is important because Chocolate Bash uses Gross Sales to calculate royalty fees and marketing fund contributions. Franchisees are required to report their monthly Gross Sales to Chocolate Bash by the 5th day of the following month. If a franchisee fails to report their monthly Gross Sales, Chocolate Bash has the right to withdraw estimated royalty fees and marketing fund contributions equal to 125% of the last Gross Sales reported. Chocolate Bash also has the right to remotely access the franchisee's point-of-sale system to calculate Gross Sales.