What constitutes 'Gross Sales' for a Clear Pest Pros business when calculating fees?
Clear_Pest_Pros Franchise · 2025 FDDAnswer from 2025 FDD Document
For fees that are calculated as a percentage of Gross Sales, "Gross Sales" means the total dollar amount of all sales generated through Clear Pest Pros Business for a given period, including, but not limited to, payment for any services or products sold by Franchisee, whether for cash or credit, in services in kind, from barter and/or exchange, payment for any services or products sold by you, or otherwise, less any sales tax or bona fide refunds to customers for non-salvageable item. Gross Sales does not include (i) bona fide refunds to customers, (ii) sales tax collected by Franchisee, (iii) sales of used equipment
not in the ordinary course of business, or (iv) sales of prepaid cards or similar products (but the redemption of any such card or product will be included in Gross Sales). Commissions paid to lead sources are subject to the Royalty.
Source: Item 6 — OTHER FEES (FDD pages 20–28)
What This Means (2025 FDD)
According to Clear Pest Pros's 2025 Franchise Disclosure Document, "Gross Sales" is a crucial figure for calculating various fees payable to the franchisor. For Clear Pest Pros, Gross Sales is defined as the total dollar amount of all sales generated through the Clear Pest Pros Business for a given period. This includes payments for any services or products sold by the franchisee, whether the payment is in cash, credit, services in kind, or through barter and/or exchange.
However, not all income is included in Gross Sales. Specifically, bona fide refunds to customers, sales tax collected by the franchisee, sales of used equipment not in the ordinary course of business, and sales of prepaid cards or similar products are excluded. It's important to note that while the sale of prepaid cards is excluded, the redemption of any such card or product will be included in Gross Sales. Additionally, commissions paid to lead sources are subject to the Royalty fee.
Understanding this definition is critical for Clear Pest Pros franchisees because several fees, including the royalty fee (7% of Gross Sales, or the greater of 7% of the Minimum Gross Sales Requirement beginning in month 7), the Brand Marketing Fee (2% of Gross Sales), and potentially local or regional cooperative fees (up to 2% of Gross Sales) and a National or Regional Accounts Fee (up to 5% of Gross Sales), are calculated as a percentage of Gross Sales. Accurate reporting of Gross Sales is therefore essential for compliance with the franchise agreement and to avoid any disputes with Clear Pest Pros.