What definition of 'Gross Sales' does Face Foundrie use in this financial performance representation?

According to Face Foundrie's 2025 Franchise Disclosure Document, 'Gross Sales' is defined as all revenue derived from the operations of a Facial Bar, but it excludes sales or use tax, customer refunds, allowances, and discounts given in good faith. The FDD specifies that gift card revenue is recognized when the gift card is redeemed. This definition is consistently applied throughout the document and is also used to calculate royalty fees and other amounts due under the Franchise Agreement.

For a prospective Face Foundrie franchisee, understanding this definition is crucial because it directly impacts the calculation of royalties and other fees payable to the franchisor. It also provides clarity on what constitutes revenue for the purpose of financial reporting and performance evaluation. By excluding taxes, refunds, and discounts from gross sales, Face Foundrie aims to provide a more accurate representation of the actual sales generated by the Facial Bar.

It's important to note that while 'Gross Sales' provides a measure of total revenue, it does not reflect the profitability of the business. Franchisees must still account for costs of sales, operating expenses, and other costs to determine their net income or profit. Face Foundrie advises prospective franchisees to conduct an independent investigation of these costs and expenses to gain a comprehensive understanding of the financial aspects of operating a Facial Bar.

Furthermore, Face Foundrie emphasizes that the financial performance representations provided in the FDD are based on historical data from existing Facial Bars and that individual results may vary. There is no assurance that a new franchisee will achieve the same level of gross sales. Therefore, it is essential for prospective franchisees to carefully consider the factors that may influence their financial performance, such as location, market conditions, and management capabilities.