What is excluded from the definition of 'Gross Sales' for a Clean Your Dirty Face franchise?
Clean_Your_Dirty_Face Franchise · 2025 FDDAnswer from 2025 FDD Document
payment instructions.
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- "Gross Sales" means all revenue that you receive, directly or indirectly, from operating your CYDF Facial Bar, including all amounts or other consideration you receive at or away from the Premises, and whether from cash, check, credit and debit card, barter exchange,
trade credit, or other credit transactions. Gross Sales includes the proceeds of any business interruption insurance or similar insurance. Gross Sales will also include amounts you earn from the sale of any online group-bought deals (e.g., Groupon or LivingSocial) and the sale of any gift cards or gift certificates, in each case calculated using our then current guidelines for calculating Gross Sales, which may include calculating such amounts, at our option, as either (i) the purchasing value of such the certificate, card or deal when it is redeemed at your CYDF Facial Bar; or (ii) the amount of the payment you received for such certificate, card or deal at the time of its sale. Gross Sales does not, however, include any federal, state, or municipal sales, use or service taxes collected from customers and paid to the appropriate taxing authority. We will require that you provide your profit and loss statements to us on a monthly basis for our review in a manner that we prescribe. If we cease to have access to your Gross Sales via the Computer System (defined in Item 11) and you fail to report your CYDF Facial Bar's Gross Sales when due, then for each payment calculated based on Gross Sales, we may debit your CYDF Facial Bar account 110% of the average of the last 3 applicable payments we debited. If the amount we debit is more than the amount you actually owe us, we will credit the excess against the amounts we otherwise would debit from your account on the next payment due date.
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Source: Item 6 — OTHER FEES (FDD pages 11–16)
What This Means (2025 FDD)
According to Clean Your Dirty Face's 2025 Franchise Disclosure Document, 'Gross Sales' encompasses all revenue received from operating the CYDF Facial Bar, whether directly or indirectly, and includes transactions made via cash, check, credit/debit card, barter exchange, trade credit, or other credit transactions. Gross Sales also accounts for proceeds from business interruption insurance or similar insurance, as well as amounts earned from online group-bought deals and the sale of gift cards or certificates, calculated according to Clean Your Dirty Face's guidelines. These guidelines may involve calculating such amounts as either the purchasing value when redeemed or the payment received at the time of sale.
However, the definition of Gross Sales for a Clean Your Dirty Face franchise specifically excludes federal, state, or municipal sales, use, or service taxes that are collected from customers and then remitted to the appropriate taxing authority. This means that franchisees do not have to pay royalties or other fees on the tax portion of their revenue, which is a common practice in franchising to avoid penalizing franchisees for collecting taxes on behalf of the government.
Clean Your Dirty Face requires franchisees to provide monthly profit and loss statements for review. If Clean Your Dirty Face loses access to the franchisee's Gross Sales data via the Computer System and the franchisee fails to report their Gross Sales when due, Clean Your Dirty Face may debit the franchisee's account 110% of the average of the last 3 applicable payments. If the debit exceeds the actual amount owed, the excess will be credited against future debits. This policy ensures that Clean Your Dirty Face can accurately calculate and collect royalties and other fees based on Gross Sales, even in situations where data access is disrupted or reporting is delayed.