What is included in the definition of 'Gross Sales' for a Mr. Sandless franchise?
Mr_Sandless Franchise · 2025 FDDAnswer from 2025 FDD Document
We have established a System-wide advertising fund (the "Advertising Fund") for the common benefit of System franchisees. You are required to participate in and contribute monthly to the Advertising
Fund an amount equal to one percent (1%) of your Gross Sales. You must pay the Advertising Fee in the same manner and at the same time as the Royalty Fees due under this Agreement. Any Businesses owned by us or our affiliates will contribute to the Advertising Fund on the same basis as our franchisees. The Advertising Fund will be administered as follows:
Source: Item 22 — CONTRACTS (FDD page 42)
What This Means (2025 FDD)
I am unable to provide the definition of 'Gross Sales' for a Mr. Sandless franchise, according to the 2025 Franchise Disclosure Document. While the document mentions that franchisees must contribute 1% of their Gross Sales to the Advertising Fund, it does not specify what is included in the definition of Gross Sales. The FDD excerpt does state that franchisees must pay the Advertising Fee in the same manner and at the same time as the Royalty Fees.
A prospective Mr. Sandless franchisee should carefully review the section of the Franchise Agreement that defines 'Gross Sales' to fully understand what revenue is subject to the advertising fee. This is important for accurate financial planning and forecasting.
To gain clarity, a prospective franchisee should ask the franchisor for a precise definition of 'Gross Sales,' including any inclusions, exclusions, and how sales taxes or discounts are treated. Understanding this definition is crucial for calculating advertising fees and overall revenue.