Are sales taxes collected included in the Gross Sales calculation for a Crave Cookies franchise?
Crave_Cookies Franchise · 2025 FDDAnswer from 2025 FDD Document
"Gross Sales" is defined in our franchise agreement as the total dollar amount of all sales generated through your business for a given period, including, but not limited to, payment for any services or products, including but not limited to, all revenues from sales at the premises and from direct delivery, catering, and/or delivery services through a third party, sold by you, whether for cash or credit. Gross Sales does not include (i) bona fide refunds to customers, (ii) sales taxes collected, (iii) sale of used equipment not in the ordinary course of business, (iv) sales of prepaid cards or similar products (but the redemption of any such card or product will be included in Gross Sales), or (v) delivery expenses or third-party platform charges.
Source: Item 23 — RECEIPTS (FDD pages 47–194)
What This Means (2025 FDD)
According to Crave Cookies's 2025 Franchise Disclosure Document, sales taxes collected are not included in the calculation of Gross Sales. Gross Sales for a Crave Cookies franchise are defined as the total dollar amount of all sales generated through the business, including payments for services or products, revenues from sales at the premises, and from direct delivery, catering, or delivery services through a third party, whether for cash or credit.
Specifically, the FDD states that Gross Sales does not include several items, one of which is sales taxes collected. This means that when calculating royalties or other fees based on a percentage of Gross Sales, a Crave Cookies franchisee can deduct the amount of sales taxes they have collected before calculating the gross sales figure.
This exclusion benefits the franchisee, as it lowers the Gross Sales figure on which royalties and other percentage-based fees are calculated. It is a fairly standard practice in franchising to exclude sales tax from gross sales calculations, as the franchisee is merely acting as a collection agent for these taxes, which are then remitted to the government.