What is included in the definition of 'Gross Revenue' for a Closet Storage Concepts franchise?

According to Closet Storage Concepts' 2025 Franchise Disclosure Document, Gross Revenue is defined as the total gross revenue derived by the franchisee from operating their Closet & Storage Concepts business. This includes revenue from cash or credit sales, encompassing both product and service sales. Installation charges are also included in the calculation of Gross Revenue.

However, there are some exclusions from the Gross Revenue calculation. Sales taxes, use taxes, Gross Revenue taxes, and other similar taxes that are added to the sales price and collected from customers are excluded. Additionally, any bona fide refunds, rebates, and discounts are deducted from the total gross revenue to arrive at the Gross Revenue figure used for royalty calculations.

Understanding this definition is crucial for a prospective Closet Storage Concepts franchisee because the royalty fee, which is 5% of weekly Gross Revenues subject to a minimum of $125 per week, is directly based on this figure. Furthermore, the local advertising fee requires the franchisee to spend the greater of 7% of monthly Gross Revenues or $2,500 per month on local advertising. Therefore, accurately calculating and reporting Gross Revenue is essential for compliance with the franchise agreement and for managing the franchisee's financial obligations to Closet Storage Concepts.