For Face Foundrie, what is included in the definition of "Gross Sales" for the purpose of financial disclosures?
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 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 revenue from gift cards is recognized when they are redeemed.
This definition of Gross Sales is important for prospective franchisees because it is used to calculate the Royalty Fee and other amounts due under the Franchise Agreement. Understanding what constitutes Gross Sales ensures that franchisees accurately report their revenue and pay the correct fees to Face Foundrie.
It is typical in the franchise industry to define Gross Sales in this manner, where revenue is the primary component, but certain deductions are allowed. Franchisees should pay close attention to these definitions to ensure compliance and accurate financial reporting.