What deductions are allowed from Gross Sales when calculating fees for a Cinch I.T. franchise?
Cinch_I_T Franchise · 2024 FDDAnswer from 2024 FDD Document
- (2) The term "Gross Sales" will mean and include the total of all revenue and income from the sale of services and products to clients of the Franchised Business or any other source, whether or not sold or performed at or from the Franchised Business and whether received in cash, in services in kind, from barter and/or exchange, on credit (whether or not payment is received), or otherwise. You will deduct from your Gross Sales (but only if they have been included) the amount of all sales tax receipts or similar tax receipts which, by law, are chargeable to clients, if the taxes are separately stated when the client is charged and if the taxes are paid to the appropriate taxing authority. You will also deduct from your Gross Sales the amount of any documented refunds, charge backs, credits and allowances which you give in good faith to clients. All barter and/or exchange transactions to which Franchised Business furnishes services and/or products in exchange for goods or services to be provided to Franchised Business by a
vendor, supplier or client will, for the purpose of determining Gross Sales, be valued at the full value of the goods and/or services so provided to Franchised Business.
Source: Item 6 — OTHER FEES (FDD pages 14–20)
What This Means (2024 FDD)
According to the 2024 Cinch I.T. Franchise Disclosure Document, Gross Sales include all revenue and income from the sale of services and products to clients, regardless of where the sale occurs or how payment is received (cash, services, credit, etc.).
When calculating fees, a Cinch I.T. franchisee can deduct certain items from Gross Sales. Specifically, franchisees may deduct the amount of all sales tax receipts or similar tax receipts which, by law, are chargeable to clients, provided these taxes are separately stated when the client is charged and are paid to the appropriate taxing authority. Franchisees can also deduct the amount of any documented refunds, charge backs, credits, and allowances given in good faith to clients.
It is important to note that all barter and/or exchange transactions where the Cinch I.T. franchise furnishes services and/or products in exchange for goods or services to be provided to the franchise by a vendor, supplier, or client will be valued at the full value of the goods and/or services provided to the franchise when determining Gross Sales.