Is the redemption of prepaid cards included in the Gross Sales calculation for a Chocolate Bash franchise?

According to Chocolate Bash's 2024 Franchise Disclosure Document, the redemption of prepaid cards is included when calculating Gross Sales. Gross Sales is defined as the total dollar amount of all sales generated through the Chocolate Bash business for a given period, including payment for any services or products sold, whether for cash or credit.

However, the initial sale of prepaid cards themselves is excluded from the Gross Sales calculation. This means that when a customer purchases a prepaid card, that transaction is not immediately counted towards the franchise's Gross Sales. Instead, Gross Sales will be recognized when the customer uses the prepaid card to purchase goods or services at the Chocolate Bash location.

For a prospective Chocolate Bash franchisee, this distinction is important for understanding how royalties and other fees based on Gross Sales are calculated. Franchisees should track both the sale of prepaid cards and their subsequent redemption to accurately report Gross Sales and manage their financial obligations to the franchisor. This also ensures compliance with the franchise agreement and avoids potential disputes over royalty payments.