For Face Foundrie, what is included in the definition of 'Gross Sales' for the purpose of this disclosure?
Face_Foundrie Franchise · 2025 FDDAnswer from 2025 FDD Document
For purposes of this disclosure, "Gross Sales" includes all revenue derived from the operations of a Facial Bar less sales or use tax and customer refunds, allowances, and discounts given in good faith. Gift card revenue is recognized upon redemption. This is the same calculation we use to calculate the Royalty Fee and other amounts under the Franchise Agreement.
Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 59–69)
What This Means (2025 FDD)
According to the 2025 Face Foundrie Franchise Disclosure Document, "Gross Sales" is defined as all revenue derived from the operations of a Face Foundrie Facial Bar, but it excludes sales or use tax, customer refunds, allowances, and discounts given in good faith. The FDD specifies that Face Foundrie recognizes gift card revenue upon redemption.
This definition of Gross Sales is important for prospective franchisees because it is the basis for calculating royalty fees and other amounts due to Face Foundrie under the Franchise Agreement. Understanding what is included and excluded from Gross Sales ensures that franchisees can accurately calculate their financial obligations to the franchisor.
It is typical in the franchise industry for franchisors to define Gross Sales in this way, as it provides a clear and consistent method for calculating royalties and other fees. Franchisees should pay close attention to the specific exclusions, such as sales tax and customer refunds, to ensure accurate reporting and avoid potential disputes with Face Foundrie.