Are sales taxes collected by the Chocolate Bash franchisee included in Gross Sales?

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, including payment for any services or products sold by the franchisee, whether for cash or credit. However, gross sales do not include sales taxes collected by the franchisee.

This means that Chocolate Bash franchisees do not have to include the sales taxes they collect when calculating their gross sales. This is a benefit for franchisees, as it reduces the amount of revenue on which they must pay royalties and other fees to the franchisor. It is a common practice in the franchise industry to exclude sales taxes from gross sales calculations.

For a prospective Chocolate Bash franchisee, this definition is important for accurately calculating royalties and other payments to the franchisor. By excluding sales taxes from gross sales, the franchisee's financial obligations to Chocolate Bash are more precisely aligned with the actual revenue generated from the sale of goods and services.