Are amounts received from credit transactions included in Gross Sales for a Hydrodog franchise?
Hydrodog Franchise · 2025 FDDAnswer from 2025 FDD Document
- 6.10 Definition of Gross Sales. As used in this Agreement, the term "Gross Sales" means all revenue you derive from operating your HydroDog Business, including, but not limited to, all amounts you receive at or away from the HydroDog Vehicle from any Services, Products or activities whatsoever including any that are in any way associated with the Marks, Copyrights or System, and whether from cash, check, barter, credit or debit card or credit transactions, including the redemption value of gift certificates redeemed by you regardless of whether such gift certificates are issued by you or someone else; but excluding: (1) all federal, state or municipal sales, use or service taxes collected from customers and paid to the appropriate taxing authority; and (2) customer refunds, adjustments, credits and allowances actually made by your HydroDog Business.
Source: Item 23 — RECEIPTS (FDD pages 43–166)
What This Means (2025 FDD)
According to Hydrodog's 2025 Franchise Disclosure Document, Gross Sales include all revenue derived from operating the Hydrodog business. This encompasses all amounts received at or away from the Hydrodog vehicle for any services, products, or activities associated with Hydrodog's trademarks, copyrights, or system. This definition explicitly includes revenue from cash, check, barter, credit or debit card, and credit transactions. It also includes the redemption value of gift certificates, regardless of who issued them.
However, the definition of Gross Sales for a Hydrodog franchise specifically excludes certain items. These exclusions are limited to: (1) all federal, state, or municipal sales, use, or service taxes collected from customers and paid to the appropriate taxing authority; and (2) customer refunds, adjustments, credits, and allowances actually made by the Hydrodog business.
For a prospective Hydrodog franchisee, this means that virtually all revenue streams are subject to royalty fees. It is important to accurately track and report all sales, including those from credit transactions, as underreporting Gross Sales can lead to penalties and potential termination of the franchise agreement. Franchisees should ensure their accounting systems properly capture all components of Gross Sales as defined in the franchise agreement to avoid discrepancies and maintain compliance.