What revenues are included in the Gross Sales calculation for a Kidokinetics franchise?

According to Kidokinetics's 2024 Franchise Disclosure Document, Gross Sales include revenues from all goods, services, and products sold through the Kidokinetics business. This encompasses all income related to the Kidokinetics business, regardless of whether it's from cash or credit transactions, and includes the full redemption value of gift cards, gift certificates, or coupons sold for use in the business. It also includes proceeds from any business interruption insurance. Fees retained by or paid to third-party sellers of gift cards, gift certificates or coupons are not excluded from the gross sales calculation. Sales of gift cards and gift certificates are included at the time the franchisee receives the funds from the purchase of such items.

However, the definition of Gross Sales does exclude certain items. Specifically, it does not include any sales tax or other taxes collected from customers and remitted to the appropriate governmental authority. It also excludes properly documented refunds to customers and properly documented employee discounts, which are limited to 3% of Gross Sales.

Prospective franchisees should understand that Gross Sales is a critical figure, as it is often used to calculate royalty fees and other payments to Kidokinetics. It is important to maintain accurate records of all sales and exclusions to ensure compliance with the franchise agreement. Franchisees should also be aware of what revenues are included and excluded from Gross Sales to accurately assess their financial performance and profitability.