What is included in the calculation of Net Sales for a Cream franchise?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
Net Sales is calculated in the same manner as Net Sales under the Franchise Agreement, and includes all revenue derived from operating the Item 19 Shops, whether from cash, check, vouchers, tickets, or other comparable forms of payment, credit and debit card, barter exchange, trade credit, or other credit transactions, net of authorized discounts (i.e., employee discounts, free birthday scoops, and good neighbor discounts and loyalty rewards).
Net Sales excludes: (i) all federal, state, or municipal sales, use, or service taxes collected from customers and paid to the appropriate taxing authority, and (ii) tips and gratuities collected for employees of the Shops.
Payments from online group-bought deals, gift certificate or gift card programs, or other similar programs were included in Net Sales upon redemption.
Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 51–57)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, Net Sales include all revenue from operating the Item 19 Shops. This encompasses revenue from various payment methods such as cash, checks, vouchers, tickets, credit and debit cards, barter exchange, trade credit, and other credit transactions. The calculation of Net Sales is net of authorized discounts like employee discounts, free birthday scoops, good neighbor discounts, and loyalty rewards.
However, Net Sales for Cream exclude certain items. Specifically, all federal, state, or municipal sales, use, or service taxes collected from customers and then paid to the appropriate taxing authority are excluded from the Net Sales calculation. Additionally, tips and gratuities collected for employees of the Shops are also excluded from Net Sales.
The FDD also specifies that payments from online group-bought deals, gift certificate programs, gift card programs, or other similar programs are included in Net Sales upon redemption. This clarification ensures that revenue from these sources is accounted for when the actual goods or services are provided, rather than when the payment method is initially purchased.