What sales taxes are excluded from the Gross Sales calculation for a Chop5 Salad Kitchen franchise?

According to Chop5 Salad Kitchen's 2024 Franchise Disclosure Document, Gross Sales exclude sales or use taxes. Gross Sales are used to calculate royalty fees, advertising fees, and other payments to Chop5 Salad Kitchen, so this exclusion reduces the base amount on which those fees are calculated.

In addition to sales or use taxes, Gross Sales also exclude amounts refunded to customers, revenues from the sale of furniture, fixtures, and equipment in the ordinary course of business, the value of approved coupons, vouchers, or similar items at the time of redemption, and tips paid to and retained by staff members as a gratuity. The manual may include policies governing the manner in which proceeds from the sale of gift cards are treated for purposes of calculating Gross Sales. The manual may also provide details on the calculation of Gross Sales relating to qualifying purchases and redemptions by members under a customer loyalty program.

By excluding these items, Chop5 Salad Kitchen aims to provide a fairer calculation of fees based on the actual revenue retained by the franchisee from the core operation of the restaurant. This is a fairly standard practice in franchising, as it ensures franchisees are not paying fees on amounts that are passed through to third parties (like taxes) or represent non-recurring revenue (like the sale of equipment).