What is considered a 'Tax Charge' under the Pearce Bespoke franchise agreement?
Pearce_Bespoke Franchise · 2025 FDDAnswer from 2025 FDD Document
The term "Gross Sales" means the total amount of all revenues Franchisee receives from the sale of goods and services, whether for cash or by check, credit card, or trade, in connection with the Pearce Bespoke Franchise, less customer refunds and returns. Gross Sales will include any sales permitted through the internet and wholesale transactions. Gross Sales will not include sales tax collected from customers and actually paid to appropriate tax authorities.
Source: Item 22 — CONTRACTS (FDD page 39)
What This Means (2025 FDD)
According to Pearce Bespoke's 2025 Franchise Disclosure Document, 'sales tax collected from customers and actually paid to appropriate tax authorities' are not included in the calculation of Gross Sales. Gross Sales are used to calculate certain fees payable to Pearce Bespoke.
For a Pearce Bespoke franchisee, this means that the royalties and other fees they pay to the franchisor are based on the revenue they generate from sales, but excluding any sales tax they collect on behalf of the government. This is a common practice in franchising, as the franchisee is simply acting as a collection agent for sales taxes, and these funds are not considered part of the franchisee's revenue.
Therefore, a prospective Pearce Bespoke franchisee should understand how Gross Sales are calculated, as this figure directly impacts the amount of fees they will owe to the franchisor. They should also ensure they have a clear understanding of which tax authorities they are responsible for remitting sales taxes to, and that they have systems in place to accurately track and report these taxes.