What is included in 'Gross Sales' for a Crown Gold Exchange franchise?

According to the 2024 Franchise Disclosure Document, Crown Gold Exchange defines 'Gross Sales' as the total dollar amount of all sales generated through the business for a given period. This includes payments for any services or products sold by the franchisee, whether the payment is made in cash or credit. This is a standard definition used by many franchises to calculate royalties and other fees.

However, the definition also specifies certain exclusions from Gross Sales. Bona fide refunds to customers are not included in the calculation. Additionally, sales taxes collected by the franchisee are excluded, as these are pass-through funds remitted to the government. Sales of used equipment not in the ordinary course of business are also excluded, as these are considered outside of normal operations. Finally, the sale of prepaid cards or similar products are not included, but the redemption of any such card or product will be included in Gross Sales.

For a prospective Crown Gold Exchange franchisee, understanding this definition is crucial because it directly impacts the royalty fees owed to the franchisor. By excluding certain items like sales tax and customer refunds, the franchisor aims to provide a fair basis for calculating royalties based on actual revenue earned from the core business activities. Franchisees should maintain accurate records to properly report Gross Sales and ensure compliance with the franchise agreement.