What page in the Creative World School FDD defines 'Adjusted Gross Revenues'?
Creative_World_School Franchise · 2025 FDDAnswer from 2025 FDD Document
| Page | ||
|---|---|---|
| I. INTR | ODUCTION | 1 |
| 1.01 1.02 1.03 1.04 | THE CREATIVE WORLD SCHOOL® SYSTEM | 1 1 |
| 1.04 | BUSINESS ORGANIZATION | |
| II. GRAN | NT AND TERM | 3 |
| 2.01 2.02 2.03 2.04 2.05 | SITE / MARKET AREA GRANT TERM PERFORMANCE RIGHTS WE RESERVE | 3 4 4 |
| III. SUCC | CESSOR TERMS. | 4 |
| 3.01 3.02 3.03 3.04 3.05 3.06 | YOUR RIGHT TO ACQUIRE A SUCCESSOR FRANCHISE GRANT OF A SUCCESSOR FRANCHISE AGREEMENTS/RELEASES. TRAINING AND REFRESHER PROGRAMS. FEES AND EXPENSES SUBSEQUENT SUCCESSOR FRANCHISES | 5 6 |
| IV. SITE | SELECTION AND DEVELOPMENT | |
| 4.01 | SITE SELECTION | 7 |
| 4.02 | ||
| 4.03 | ||
| V. SCHO | OOL DEVELOPMENT, DECOR AND OPERATING ASSETS | 9 |
| 5.01 5.02 5.03 5.04 5.05 5.06 5.07 | SCHOOL DEVELOPMENT DECOR APPROVED DECORATOR APPROVED ARTIST OPENING PACKAGE AND OPERATING ASSETS SCHOOL OPENING GRAND OPENING PROGRAM | 11 11 11 11 |
| VI. FEES | S | 12 |
| 6.01 6.02 6.03 6.04 6.05 | INITIAL FRANCHISE FEE ROYALTY OPENING PACKAGE SYSTEM STANDARDS FEE ACCREDITATION FEE | 12 12 13 |
| 6.06 6.07 6.08 6.09 | ELECTRONIC FUNDS TRANSFER/ACH DEFINITION OF "GROSS REVENUES" DEFINITION OF "ADJUSTED GROSS REVENUES" INTEREST ON LATE PAYMENTS | 13 13 14 |
| 6.10 6.11 6.12 6.13 | LATE PAYMENT PENALTIES APPLICATION OF PAYMENTS PAYMENT OFFSETS DISCONTINUANCE OF SERVICE | 14 14 14 |
Source: Item 23 — RECEIPTS (FDD pages 80–247)
What This Means (2025 FDD)
According to the 2025 Creative World School FDD, the definition of "Adjusted Gross Revenues" can be found on page 14, as indicated in the table of contents. This section is crucial for prospective franchisees because it clarifies how royalties are calculated. Royalties are based on Adjusted Gross Revenues, not simply Gross Revenues.
Adjusted Gross Revenue is defined as Gross Revenue less any authorized discounts and deductions as described in the manuals or otherwise. Creative World School retains the right to limit any discounts, offsets, credits, or deductions for child care and day care services. This means that while franchisees may offer discounts to attract customers, these discounts may be limited for the purpose of royalty calculation.
If a franchisee offers discounts exceeding the authorized deductions, they must add back the excess amount when calculating royalties and marketing contributions. This ensures that Creative World School receives its fair share of revenue, regardless of the discounts offered to customers. Understanding this definition is essential for franchisees to accurately report their revenues and avoid potential discrepancies or underpayments.
Therefore, it is important for potential franchisees to carefully review the manuals and any other documentation provided by Creative World School to fully understand which deductions are authorized and how to properly calculate Adjusted Gross Revenues. This will help in accurately forecasting potential earnings and ensuring compliance with the franchise agreement.