What is included in the Gross Sales definition for a Hydrodog franchise?
Hydrodog Franchise · 2025 FDDAnswer from 2025 FDD Document
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- "Gross Sales" are defined in the Franchise Agreement as all revenue you derive from operating the 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, provided that such refunds, adjustments, credits and allowances are documented and verifiable.
Source: Item 6 — OTHER FEES (FDD pages 12–16)
What This Means (2025 FDD)
According to Hydrodog's 2025 Franchise Disclosure Document, Gross Sales encompass all revenue derived from operating the business. This includes all amounts received at or away from the HydroDog Vehicle for any services, products, or activities associated with Hydrodog's trademarks, copyrights, or system. Revenue sources include cash, checks, barter, credit or debit card transactions, and the redemption value of gift certificates, regardless of who issued them.
However, the definition of Gross Sales for a Hydrodog franchise excludes certain items. Specifically, it excludes all federal, state, or municipal sales, use, or service taxes collected from customers and remitted to the appropriate taxing authority. Additionally, customer refunds, adjustments, credits, and allowances actually made by the HydroDog Business are excluded, provided these are documented and verifiable.
Understanding the inclusions and exclusions in the Gross Sales definition is crucial for Hydrodog franchisees because the Royalty Fee and Marketing Fund Fee are calculated as a percentage of Gross Sales. The Royalty Fee is 7% of Gross Sales per week or $250 per week per Territory, whichever is greater, and the Marketing Fund Fee is 2% of Gross Sales. Accurate reporting of Gross Sales is essential for compliance with the franchise agreement and to avoid potential penalties, such as audit expenses if underreporting exceeds 2%.