What is excluded from the definition of 'Gross Sales' for a Mr. Sandless franchise?
Mr_Sandless Franchise · 2025 FDDAnswer from 2025 FDD Document
13.4.1 Within ten (10) business days of Franchisor's request, Franchisee shall provide a quarterly expenditure report accurately reflecting Franchisee's expenditures in the Territory for the preceding quarterly period. The following costs and expenditures incurred by Franchisee shall not be included in Franchisee's expenditures on Local Advertising for purposes of this Section, unless approved in advance by Franchisor in writing: (i) incentive programs for employees or agents of Franchisee; (ii) research expenditures; (iii) salaries and expenses of any of Franchisee's personnel to attend advertising meetings, workshops or other marketing activities; (iv) charitable, political or other contributions or donations.
Source: Item 22 — CONTRACTS (FDD page 42)
What This Means (2025 FDD)
According to the 2025 Mr. Sandless Franchise Disclosure Document, when calculating the required monthly local advertising spend of $1,500, certain costs and expenditures are not included unless pre-approved by Mr. Sandless in writing. These exclusions provide clarity on what qualifies as a legitimate advertising expense for meeting the franchise agreement's requirements.
Specifically, the following expenses are excluded from the calculation of local advertising expenditures: (i) incentive programs for employees or agents of the franchisee; (ii) research expenditures; (iii) salaries and expenses of any of the franchisee’s personnel to attend advertising meetings, workshops, or other marketing activities; and (iv) charitable, political, or other contributions or donations.
This means that a Mr. Sandless franchisee cannot count employee bonuses, market research costs, staff travel to marketing events, or charitable donations towards their required $1,500 monthly advertising spend unless they obtain prior written approval from Mr. Sandless. This ensures that advertising funds are directed towards activities that directly promote the Mr. Sandless brand and services within the designated territory, rather than being used for unrelated or indirect expenses.