What is included in the definition of 'Gross Sales' for a Gold Star franchise?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
Note 1: The term "Gross Sales" means the total of all revenues generated by Franchisee from any source, whether from cash sales or charge sales, whether based on activities conducted at the Store or otherwise associated with the business and including without limitation any revenues earned off-premises, such as delivery, catering events, food trucks, etc., without reserve or deduction for uncollected credit accounts. "Gross Sales" shall not include sales taxes that are separately stated and collected by Franchisee or refunds, discounts or allowances that are made to customers, in good faith and consistent with Gold Star's policies prescribed from time to time.
Source: Item 6 — OTHER FEES (FDD pages 12–18)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, "Gross Sales" is comprehensively defined for the purpose of calculating fees. It encompasses the total revenue generated by the franchisee from all sources, whether in cash or charged sales. This includes revenue from activities at the store and any business associated with the franchise, such as off-premises activities like delivery services, catering events, and food trucks.
However, the definition of "Gross Sales" does allow for some deductions. Specifically, sales taxes that are separately stated and collected by the franchisee are excluded from gross sales. Additionally, refunds, discounts, or allowances made to customers in good faith and consistent with Gold Star's policies are also deducted from the gross sales figure.
This definition is important for prospective franchisees because it directly impacts the calculation of continuing franchise fees and potentially other fees. Understanding what constitutes "Gross Sales" ensures accurate financial reporting and fee payments to Gold Star. Franchisees should be aware of what revenue streams are included and what deductions are permitted to avoid any discrepancies or disputes with the franchisor.