What is included in the definition of 'Gross Sales' for a Deck Medic business?
Deck_Medic Franchise · 2024 FDDAnswer from 2024 FDD Document
Note 3: Gross Sales – "Gross Sales" means the total dollar sales from all business and customers of your Deck Medic Business and includes the total gross amount of revenues and sales from whatever source derived, whether in form of cash, credit, agreements to pay or other consideration including the actual retail value of any goods or services traded, borrowed, or received by you in exchange for any form of non-money consideration (whether or not payment is received at the time of the sale), from or derived by you or any other person or Corporate Entity from business conducted or which started in, on, from or through your Deck Medic Business and/or your Operating Territory, whether such business is conducted in compliance with or in violation of the terms of the Franchise Agreement. Gross Sales include the total gross amount of revenues and sales from whatever source derived from and/or derived by you including, any person and/or Corporate Entity acting on your behalf, from business conducted within and/or outside your operating territory that is related to your Deck Medic Business and/or a competitive business located and/or operated within your Operating Territory, outside your operating territory, and/or otherwise. Gross Sales do not include (a) sales taxes that you collect and remit to the proper taxing authority, and (b) authorized promotional discounts that you provide to customers.
Source: Item 6 — OTHER FEES (FDD pages 11–15)
What This Means (2024 FDD)
According to Deck Medic's 2024 Franchise Disclosure Document, "Gross Sales" is defined as the total dollar sales from all business and customers of your Deck Medic Business. This encompasses all revenues and sales, regardless of the source, whether in cash, credit, or other forms of consideration. It also includes the retail value of any goods or services traded, borrowed, or received in exchange for non-monetary consideration, irrespective of when payment is received. Gross Sales also include revenues derived from business conducted within or outside the franchisee's operating territory that is related to the Deck Medic Business or a competitive business located within the operating territory.
For a prospective Deck Medic franchisee, this definition is crucial because several fees are calculated based on Gross Sales. These include the royalty fee, which is 6% of monthly Gross Sales, the national advertising fund fee, which can be up to 2% of monthly Gross Sales (currently 1%), and local marketing expenditures, which require franchisees to spend 5% of the preceding year's Gross Sales on local marketing starting in the second year of operation. Understanding what constitutes Gross Sales ensures accurate calculation and payment of these fees.
However, the definition of Gross Sales does not include sales taxes that the franchisee collects and remits to the proper taxing authority, nor does it include authorized promotional discounts provided to customers. This distinction is important for franchisees to accurately calculate their Gross Sales and, consequently, the fees owed to Deck Medic. Franchisees should ensure they have a clear understanding of these exclusions to maintain accurate financial reporting and compliance with the franchise agreement.