What is included in the definition of 'Gross Sales' for a Floyds 99 franchise?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
"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 the 2025 Floyds 99 Franchise Disclosure Document, "Gross Sales" is comprehensively defined for the purpose of calculating royalty payments. It encompasses the total income from all services, products, and merchandise sold through the Floyds 99 barbershop. This includes sales made both at the physical location and away from it, covering all transactions whether they are cash or credit-based. Additionally, revenues generated from vending machines and the sales of promotional items, such as caps, T-shirts, and jackets, are also included in the gross sales calculation.
However, the definition also specifies certain exclusions from gross sales. These exclusions include federal, state, and municipal sales or service taxes collected from clients and remitted to the appropriate taxing authorities. Furthermore, discounts that have received prior written approval from Floyds 99 are also excluded from the gross sales figure. The FDD also allows for other exclusions authorized in writing by Floyds 99.
Understanding what constitutes "Gross Sales" is crucial for a prospective Floyds 99 franchisee because it directly impacts the weekly royalty payments. The royalty is calculated as 6% of the gross sales, so accurately tracking and reporting all sales, while properly accounting for approved exclusions, is essential for financial compliance and profitability. Franchisees should pay close attention to the stipulations around discounts and exclusions, ensuring they adhere to Floyds 99's policies to avoid discrepancies in royalty payments.