According to Hydrodog's 2025 Franchise Disclosure Document, the calculation of 'Gross Sales' for a Hydrodog business excludes specific items. Gross Sales encompasses all revenue derived from operating the HydroDog Business, including amounts received 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 regardless of whether such gift certificates are issued by the HydroDog Business or someone else.

However, there are two specific exclusions from this broad definition. First, all federal, state, or municipal sales, use, or service taxes collected from customers and then paid to the appropriate taxing authority are excluded from the Gross Sales calculation. Second, customer refunds, adjustments, credits, and allowances actually made by the HydroDog Business are also excluded, provided that these refunds, adjustments, credits, and allowances are documented and verifiable.

For a prospective Hydrodog franchisee, this definition is important for understanding how royalties and other fees owed to Hydrodog are calculated, as these are typically based on a percentage of Gross Sales. It is also important for accurately tracking and reporting revenue, as well as for tax purposes. Franchisees should ensure they have systems in place to properly document all refunds, adjustments, credits, and allowances to ensure accurate reporting and compliance with the franchise agreement.