Are sales of prepaid cards included in Gross Sales for a Crown Gold Exchange?

According to Crown Gold Exchange's 2024 Franchise Disclosure Document, the initial sale of prepaid cards is excluded from gross sales calculations. However, the redemption of these prepaid cards is included in the gross sales. Gross sales are important because they are used to calculate royalty fees owed to Crown Gold Franchising.

Gross sales for a Crown Gold Exchange are defined as the total dollar amount of all sales generated through the business for a given period, including payments for any services or products sold by the franchisee, whether for cash or credit. This broad definition ensures that most revenue streams are included when calculating the royalty fee.

However, there are specific exclusions from the gross sales calculation. These exclusions include bona fide refunds to customers, sales taxes collected by the franchisee, and sales of used equipment not in the ordinary course of business. Most importantly, the sales of prepaid cards or similar products are excluded, but the redemption of any such card or product will be included in Gross Sales.

For a prospective franchisee, this means that while the initial sale of a prepaid card does not contribute to the gross sales figure on which royalties are based, the revenue recognized when the card is used for purchases at the Crown Gold Exchange location does count towards gross sales. This distinction is important for financial planning and royalty payment calculations.