What is included in the definition of 'Gross Revenues' for a Creative World School franchise?
Creative_World_School Franchise · 2025 FDDAnswer from 2025 FDD Document
- (2) Gross Revenues 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 6 — OTHER FEES (FDD pages 15–18)
What This Means (2025 FDD)
According to Creative World School's 2025 Franchise Disclosure Document, Gross Revenues encompass a broad range of income sources related to the operation of the franchised school. This includes all revenues and income generated from services, product sales, and any activities connected to the school, whether conducted at the site or elsewhere. This definition extends to all enrollment fees, tuition fees, and any amounts received from activities or services associated with Creative World School's trademarks, regardless of the payment method (cash, check, credit, etc.).
Specifically, the definition of Gross Revenues includes condemnation awards received for loss of revenue or business, whether paid directly to the franchisee or their affiliates. It also incorporates the fair market value of any goods or services received in lieu of cash payments. The franchisee is obligated to inform Creative World School of any noncash consideration received.
However, Gross Revenues exclude federal, state, and municipal sales, use, or service taxes that are collected from customers and remitted to the appropriate taxing authorities. This exclusion is a standard practice in franchising, ensuring that franchisees are not penalized for collecting and passing on taxes. Understanding the inclusions and exclusions in the Gross Revenues definition is crucial for Creative World School franchisees, as it directly impacts royalty payments and other financial obligations to the franchisor.