What items are specifically excluded from the Gross Sales calculation for a Kidokinetics franchise?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
"Gross Sales" means the revenues you receive from the sales of all goods, services and products sold at, from, or through the Kidokinetics Business or made pursuant to the rights granted hereunder, and all other income of every kind and nature related to the Kidokinetics Business, whether from cash, or credit, or otherwise, and regardless of collection in the case of credit, including the full redemption value of any gift card, gift certificate or coupon sold for use in the Kidokinetics Business (fees retained by or paid to third-party sellers of such gift cards, gift certificates or coupons are not excluded from this calculation), and all proceeds from any business interruption insurance. It does not include (i) any sales tax or other taxes collected from customers for, and turned over to, the governmental authority imposing the tax, (ii) properly documented refunds to customers, or (iii) properly documented employee discounts (limited to 3% of Gross Sales). Gross Sales include sales of gift cards and gift certificates at the time the franchisee receives the funds from the purchase of such gift cards and gift certificates.
Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 46–54)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, Gross Sales for a Kidokinetics business include revenues from all goods, services, and products sold, as well as all other income related to the business, including the full redemption value of gift cards, gift certificates, or coupons. This calculation also includes proceeds from any business interruption insurance.
However, the calculation of Gross Sales for a Kidokinetics franchise specifically excludes a few items. These exclusions include (i) any sales tax or other taxes collected from customers that are then turned over to the appropriate governmental authority, (ii) properly documented refunds to customers, and (iii) properly documented employee discounts, which are limited to 3% of Gross Sales.
It is important for prospective Kidokinetics franchisees to understand exactly how Gross Sales are defined, as this figure is used to calculate royalty fees and other payments to the franchisor. By excluding these specific items, Kidokinetics aims to provide a clearer picture of the revenue actually earned by the franchisee from the core business operations. Franchisees should maintain accurate records of all sales, taxes, refunds, and employee discounts to ensure accurate reporting of Gross Sales.