How does Chocolate Fish Coffee define 'Gross Sales' in its franchise agreement?

According to Chocolate Fish Coffee's 2024 Franchise Disclosure Document, "Gross Sales" is a critical figure, as it is used to calculate royalty fees and other payments to the company. Chocolate Fish Coffee defines "Gross Sales" as the total dollar amount of all sales generated through your business for a given period, including payments for any services or products sold, whether for cash or credit. This means that all revenue streams from the Chocolate Fish Coffee location are included in this calculation.

However, the definition also specifies certain exclusions from "Gross Sales". These exclusions include bona fide refunds to customers, sales taxes collected, sales of used equipment not in the ordinary course of business, and sales of prepaid cards or similar products. It is important to note that while the sale of prepaid cards is excluded, the redemption of these cards is included in Gross Sales.

Understanding this definition is crucial for a prospective Chocolate Fish Coffee franchisee because it directly impacts the amount of royalty fees owed to the franchisor. By clearly outlining what constitutes "Gross Sales" and what is excluded, Chocolate Fish Coffee aims to provide transparency and avoid potential disputes over revenue calculations. Franchisees should carefully review this definition and ensure they accurately track and report their sales to comply with the franchise agreement.