Are discounts approved in advance by Floyds 99 included in the Gross Sales calculation?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
- 12.2 Gross Sales. "Gross Sales" shall mean and include the aggregate amount of all sales of services, products or merchandise of every kind or nature sold from, at or in connection with or arising out of the operation or conduct of business at the Barbershop or, if the Franchisee is an entity, arising out of the operation or conduct of any business by such entity, including sales made at or away from the Barbershop, whether for cash or credit, and any revenues from vending machines and from sales of promotional items such as caps, T-shirts, jackets, and similar items, less merchandise returns for which refunds are made, and less service refunds, provided that no refund shall exceed the sales price, but excluding all: (i) federal, state or municipal sales or service taxes collected from clients and paid to the appropriate taxing authority; (ii) discounts that have been approved in advance by the Franchisor in writing; and (iii) other exclusions as may be authorized in writing by the Franchisor.
Source: Item 22 — CONTRACTS (FDD pages 57–58)
What This Means (2025 FDD)
According to Floyds 99's 2025 Franchise Disclosure Document, Gross Sales are used to calculate the weekly royalty fee. Gross Sales includes all sales of services, products, or merchandise. However, the calculation of Gross Sales for Floyds 99 excludes a few items. Specifically, Gross Sales excludes federal, state, or municipal sales or service taxes collected from clients and paid to the appropriate taxing authority.
Importantly, the Gross Sales calculation for Floyds 99 also excludes discounts that have been approved in advance by the Franchisor in writing. This means that if a franchisee offers a discount that Floyds 99 has pre-approved in writing, the discounted amount is not included when calculating the Gross Sales figure used to determine the weekly royalty payment.
In addition to pre-approved discounts and sales tax, Gross Sales also excludes other exclusions as may be authorized in writing by Floyds 99. This provides Floyds 99 with flexibility to adjust the Gross Sales calculation under specific circumstances, as long as they provide written authorization.