What is the definition of 'Gross Sales' for Crown Gold Exchange, as used in Item 19?

According to Crown Gold Exchange's 2024 Franchise Disclosure Document, Item 19 defines "Gross Sales" as the average revenue derived from the sale of goods or services, less sales tax, discounts, and returns. This definition is important for prospective franchisees because it clarifies how Crown Gold Exchange calculates the sales figures presented in the Financial Performance Representation. Understanding this definition is crucial for evaluating the potential financial performance of a Crown Gold Exchange franchise.

Specifically, when reviewing the gross sales figures for the seven affiliate-owned locations in California, a potential franchisee should remember that these figures do not represent the actual cash a franchisee would pocket. The gross sales numbers, such as the $2,797,519.00 reported for the Riverside, CA location, are before deductions for sales tax, discounts, and returns. Furthermore, these gross sales figures do not account for operating expenses like cost of goods sold, labor, advertising, or rent, which would significantly impact net income.

It is also important to note that the Item 19 data includes an estimated royalty fee of $12,000 per location. This is included to show the estimated expenditures for each affiliate had they incurred those expenses. Crown Gold Exchange emphasizes that the financial results are historical and not projections of future performance, and that individual results may vary. The FDD also states that written substantiation of the information contained in Item 19 will be made available to prospective franchisees upon reasonable request.