What is excluded from the definition of Gross Sales for a Floors To Go showroom?

According to Floors To Go's 2025 Franchise Disclosure Document, gross sales include all revenue from the showroom for goods and services. However, the definition of gross sales specifically excludes sales and use taxes and refunds. This definition is important because several fees, such as the local advertising fee, are calculated as a percentage of monthly gross sales.

For a prospective Floors To Go franchisee, understanding what constitutes gross sales is crucial for accurate financial planning and reporting. By excluding sales and use taxes, the franchisee does not pay a percentage of these pass-through taxes. Similarly, excluding refunds ensures that franchisees are not penalized for returned merchandise or services.

It is important for franchisees to maintain accurate records of sales, taxes, and refunds to correctly calculate gross sales and, consequently, the fees owed to Floors To Go. Floors To Go retains the right to audit the franchisee's books and records to verify the accuracy of these figures, and discrepancies of 2% or more may result in the franchisee being responsible for the costs and expenses associated with the audit.