What is excluded from 'Gross Sales' when calculating revenue for an Endless Summer Sweets franchise?

According to Endless Summer Sweets' 2024 Franchise Disclosure Document, 'Gross Sales' are defined as the total dollar amount of all sales generated through the Business for a given period, including payment for any services or products sold by Franchisee, whether for cash or credit.

However, the following items are specifically excluded from the calculation of Gross Sales: (i) bona fide refunds to customers, (ii) sales taxes collected by Franchisee, (iii) sales of used equipment not in the ordinary course of business, and (iv) sales of prepaid cards or similar products. It is important to note that while the sale of prepaid cards is excluded, the redemption of any such card or product will be included in Gross Sales.

For a prospective Endless Summer Sweets franchisee, understanding this definition is crucial for accurately reporting revenue and calculating royalties or other fees owed to the franchisor. Franchisees should keep detailed records of all sales, refunds, sales taxes, and prepaid card transactions to ensure compliance with the franchise agreement.