Are sales taxes included in the 'Gross Sales' calculation for a Focalpoint Coaching franchise?
Focalpoint_Coaching Franchise · 2025 FDDAnswer from 2025 FDD Document
As used in this Agreement, the term "Gross Sales" means all revenue that Franchisee derives from operating the Franchised Business, including, but not limited to, all amounts that Franchisee receives for Services and products sold or rendered by the Franchised Business, and whether from cash, check, credit and debit card, barter exchange, trade credit, or other credit transactions and all other income of every kind and nature related to the Franchised Business, but (1) excluding all federal, state, or municipal sales, use, or service taxes collected from clients and paid to the appropriate taxing authority and (2) reduced by the amount of any documented refunds, credits, allowances, and charge-backs the Franchised Business in good faith gives to clients.
Source: Item 22 — Contracts (FDD pages 56–57)
What This Means (2025 FDD)
According to the 2025 Focalpoint Coaching Franchise Disclosure Document, the definition of "Gross Sales" specifically excludes sales taxes. Gross Sales includes all revenue a franchisee derives from operating the franchised business, including revenue from services and products sold, regardless of the form of payment (cash, credit, etc.) and all other income related to the business.
However, the FDD explicitly states that federal, state, or municipal sales, use, or service taxes collected from clients and paid to the appropriate taxing authority are excluded from the calculation of Gross Sales. Additionally, any documented refunds, credits, allowances, and charge-backs that the Focalpoint Coaching franchised business gives to clients in good faith are also deducted from gross sales.
This definition is important because Focalpoint Coaching calculates royalties and other fees based on a percentage of Gross Sales. By excluding sales taxes from the calculation, Focalpoint Coaching ensures that franchisees are not paying royalties on money that is simply being passed through to government entities. This is a fairly standard practice in franchising, as it ensures a fairer calculation of revenue on which royalties are based.