For Face Foundrie, what is included in the definition of "Gross Sales" for the purposes 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 Face Foundrie Facial Bar, less sales or use tax, customer refunds, allowances, and discounts given in good faith. This definition is used for financial performance representations within the FDD.
For a prospective Face Foundrie franchisee, understanding this definition is crucial because it directly impacts the calculation of royalty fees and other amounts due under the Franchise Agreement. The franchisor uses this Gross Sales figure to assess the financial performance of both corporate and franchised locations.
It is also important to note that gift card revenue is recognized upon redemption, not upon the initial sale of the gift card. This could affect the timing of revenue recognition and should be considered when forecasting sales and managing cash flow. Franchisees should also be aware that the Gross Sales figures presented in the FDD are not audited and do not reflect costs of sales, operating expenses, or other costs that must be deducted to determine net income or profit.