What sales are expressly excluded from the Gross Sales calculation for a Hyper Kidz franchise?
Hyper_Kidz Franchise · 2024 FDDAnswer from 2024 FDD Document
For the purposes of determining the fees to be paid under the Franchise Agreement, "Gross Sales" means the total selling price of all services and products and all income of every other kind and nature related to the Franchised Business, whether for cash or credit and regardless of collection in the case of credit. If a cash shortage occurs, the amount of Gross Sales will be determined based on the records of the point of sale system and any cash shortage will not be considered in the determination. Gross Sales expressly excludes taxes collected from your customers and paid to the appropriate taxing authority and customer refunds or adjustments. We may authorize certain other items to be excluded from Gross Sales. Any exclusion may be revoked or withdrawn at any time by us.
Source: Item 6 — OTHER FEES (FDD pages 10–15)
What This Means (2024 FDD)
According to Hyper Kidz's 2024 Franchise Disclosure Document, Gross Sales are defined as the total selling price of all services and products, and all income of every kind related to the franchised business, whether for cash or credit, regardless of collection. However, there are some express exclusions to this calculation.
Specifically, Gross Sales for a Hyper Kidz franchise expressly exclude taxes collected from customers that are then paid to the appropriate taxing authority. Additionally, customer refunds or adjustments are also excluded from the Gross Sales calculation.
The agreement also states that Hyper Kidz may authorize certain other items to be excluded from Gross Sales, but they retain the right to revoke or withdraw any exclusion at any time. This means that while there may be opportunities to reduce the Gross Sales figure used to calculate royalty and brand development fees, these are not guaranteed and are subject to change at the discretion of Hyper Kidz.