What is excluded from the definition of 'Gross Revenues' for a Creative World School?
Creative_World_School Franchise · 2025 FDDAnswer from 2025 FDD Document
As used in this Agreement, the term "Gross Revenue" means all revenues and/or income generated from the provision of any and all services, the sales of any and all products, and performance of any and all other activities connected to or arising from the Franchised Business School at or away from the site, including, but not limited to, all enrollment fees, tuition fees, charges or all amounts you receive at or away from the Site from any activities or services whatsoever including any that are in any way associated with the Marks, and whether from cash, check, barter, credit or debit card or credit transactions, but excluding all federal, state or municipal sales, use or service taxes collected from customers and actually paid to the appropriate taxing authority.
Gross Revenues also
includes (a) condemnation awards received directly or indirectly for loss of revenue or business, whether generated by, or paid to, you or your affiliates, and (b) the fair market value of any goods or services received, directly or indirectly, by you if consideration other than cash is received. You will notify us of any noncash consideration Franchisee receives.
Source: Item 23 — RECEIPTS (FDD pages 80–247)
What This Means (2025 FDD)
According to Creative World School's 2025 Franchise Disclosure Document, the definition of 'Gross Revenues' specifically excludes federal, state, and municipal sales, use, or service taxes collected from customers, provided these taxes are actually paid to the appropriate taxing authority. This means that while Creative World School franchisees must collect these taxes from customers, the amounts collected and remitted do not count towards the revenue on which royalties are calculated.
Gross Revenues for a Creative World School encompass all income generated from services, product sales, and activities related to the franchised business, whether at the school site or elsewhere. This includes enrollment fees, tuition, and any other amounts received from activities or services associated with the Creative World School brand. Revenue sources can be in the form of cash, checks, barter, credit or debit card transactions, or credit transactions.
Furthermore, Gross Revenues include condemnation awards received for loss of revenue or business, whether paid directly to the franchisee or their affiliates. It also includes the fair market value of any goods or services received by the franchisee in forms other than cash. Franchisees are required to notify Creative World School of any noncash consideration they receive. Understanding what constitutes Gross Revenues is crucial for franchisees as it directly impacts the calculation of royalty payments and other financial obligations to the franchisor.