For Goldfish Swim School, what is included in the definition of 'gross sales' for the franchised swim school?

According to the 2025 Goldfish Swim School Franchise Disclosure Document, gross sales are defined as all revenue from the franchised swim school. However, gross sales do not include sales tax or use tax. This definition is important because several fees payable to Goldfish Swim School are calculated as a percentage of gross sales.

Specifically, the local advertising fee is 2% of gross sales, but if the franchisee is part of an advertising cooperative, it can be no more than 5% of gross sales. Audit expenses may be incurred if an audit reveals that the franchisee has not spent the required 2% of quarterly gross sales on local advertising or has underreported amounts owed to Goldfish Swim School by 3% or more.

Understanding what constitutes gross sales is crucial for franchisees to accurately calculate and pay the required fees, as well as to ensure compliance with advertising expenditure requirements. Franchisees should carefully track their revenue and ensure they understand which items are excluded from gross sales to avoid potential discrepancies and audit-related expenses.