factual

For a Clear Pest Pros franchise, what sales are specifically excluded from the calculation of 'Gross Sales'?

Clear_Pest_Pros Franchise · 2025 FDD

Answer from 2025 FDD Document

You must report your Gross Sales each month. "Gross Sales," as used in this Agreement, 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 items. 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. If you transfer the Franchise Agreement to a new owner, the Royalty for all jobs completed prior to the transfer must be paid on the day of closing, regardless of whether the invoice(s) is paid in full. On the effective date of termination of the Franchise Agreement, either by you or us, you must pay us the Royalty for all completed jobs.

Source: Item 22 — CONTRACTS (FDD pages 67–68)

What This Means (2025 FDD)

According to Clear Pest Pros's 2025 Franchise Disclosure Document, 'Gross Sales' for royalty calculation excludes specific items. Gross Sales is defined as the total dollar amount of all sales generated through the Clear Pest Pros business.

Specifically, the following are subtracted from total sales to arrive at Gross Sales: (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. However, the redemption of any such card or product will be included in Gross Sales.

This definition is important for franchisees because the royalty fees owed to Clear Pest Pros are calculated based on Gross Sales. Understanding what is included and excluded from this calculation is essential for accurate financial reporting and royalty payments. Additionally, commissions paid to lead sources are subject to the Royalty.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.