How does Crown Gold Exchange define 'Gross Sales' in the franchise agreement?
Crown_Gold_Exchange Franchise · 2024 FDDAnswer from 2024 FDD Document
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- "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 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, or (iv) sales of prepaid cards or similar products (but the redemption of any such card or product will be included in Gross Sales).
Source: Item 6 — OTHER FEES (FDD pages 10–12)
What This Means (2024 FDD)
According to Crown Gold Exchange's 2024 Franchise Disclosure Document, the franchise agreement defines 'Gross Sales' as the total dollar amount of all sales generated through the business. This includes payments for any services or products sold, whether the payment is in cash or credit. This is a standard definition used by many franchises to calculate royalties and other fees.
However, the definition of Gross Sales for Crown Gold Exchange specifically excludes certain items. These exclusions include bona fide refunds to customers, sales taxes collected, sales of used equipment not in the ordinary course of business, and sales of prepaid cards or similar products. It is important to note that while the sale of prepaid cards is excluded, the redemption of these cards is included in Gross Sales.
Understanding what constitutes Gross Sales is crucial for a prospective Crown Gold Exchange franchisee. This definition directly impacts the calculation of royalty fees and other financial obligations to the franchisor. Franchisees should carefully review this definition in the franchise agreement and seek clarification from Crown Gold Exchange regarding any specific scenarios or transactions that may not be explicitly covered in the definition.