What deductions are allowed from Gross Sales for a Cinch I.T. franchise?
Cinch_I_T Franchise · 2024 FDDAnswer from 2024 FDD Document
- (j) As used in this Agreement, the term "Gross Sales" shall mean and include the total of all revenue and income which You are entitled to receive from the provision 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 the Franchised Business' Gross Sales (but only to the extent they have been included) the amount of all sales tax receipts or similar tax receipts which, by law, are chargeable to clients, if such taxes are separately stated when the client is charged and as long as such taxes are promptly paid to the appropriate taxing authority.
You may also deduct from the Franchised Business' Gross Sales the amount of any documented refunds, charge-backs, credits and allowances You pay in good faith to clients.
Source: Item 23 — RECEIPTS (FDD pages 60–269)
What This Means (2024 FDD)
According to Cinch I.T.'s 2024 Franchise Disclosure Document, franchisees can deduct certain items from their gross sales. Specifically, franchisees may deduct sales tax receipts or similar tax receipts from gross sales, but only if these taxes are chargeable to clients, separately stated when the client is charged, and promptly paid to the appropriate taxing authority.
Additionally, Cinch I.T. franchisees can deduct the amount of documented refunds, charge-backs, credits, and allowances they pay in good faith to clients. This means that if a customer receives a refund or credit for any reason, the franchisee can subtract that amount from their gross sales when calculating royalties and other fees owed to Cinch I.T.
It is important for prospective Cinch I.T. franchisees to maintain accurate records of all deductions, as Cinch I.T. requires franchisees to submit reports reflecting sales data and any additional information that Cinch I.T. deems reasonably necessary. These reports must be submitted electronically by the fourteenth day of the following month. Franchisees are also required to provide annual reports of gross sales within thirty days of the end of their fiscal year.