For Closet Storage Concepts, what is included in the definition of 'Gross Revenue'?
Closet_Storage_Concepts Franchise · 2025 FDDAnswer from 2025 FDD Document
For the purpose of this Agreement, above, the term "Gross Revenue" is defined as the total gross revenue derived by Franchisee from the operation of Franchisee's Closet & Storage Concepts business whether from sales for cash or credit, including sales of both products and services, and including installation charges, exclusive of all sales taxes, use taxes, Gross Revenue taxes and other similar taxes added to the sales price and collected from the customer, and less any bona fide refunds, rebates, and discounts.
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2025 FDD)
According to Closet Storage Concepts' 2025 Franchise Disclosure Document, gross revenue is defined as the total gross revenue a franchisee derives from operating their Closet & Storage Concepts business. This includes revenue from cash and credit sales, encompassing both product and service sales. Installation charges are also included in the calculation of gross revenue.
However, the definition of gross revenue for Closet Storage Concepts specifically excludes certain items. These exclusions include all sales taxes, use taxes, gross revenue taxes, and other similar taxes that are added to the sales price and collected from customers. Additionally, any bona fide refunds, rebates, and discounts are subtracted from the total revenue to arrive at the gross revenue figure.
This definition is important because Closet Storage Concepts calculates royalty fees based on a percentage of the franchisee's gross revenue. Therefore, understanding what constitutes gross revenue, including what is included and excluded, is crucial for a franchisee to accurately calculate and pay their royalty fees. Additionally, the local advertising fee is calculated based on a percentage of gross revenues, further emphasizing the importance of this definition.