What is the definition of 'Net Sales' for a Pearce Bespoke franchise, and what deductions are allowed?
Pearce_Bespoke Franchise · 2025 FDDAnswer from 2025 FDD Document
-
- "Gross Sales" means the total revenues you receive from the sale of goods and services, whether by cash or by check, credit card, or trade, in connection with the Franchise, less customer refunds and returns and sales or similar taxes. Gross Sales includes any sales permitted through the internet.
-
- "Net Sales" means Gross Sales minus: (i) the amount of any documented refunds, chargebacks provided to customers or retailers in good faith; and (ii) Licensor designated or approved discounts, promotions, or credits.
Source: Item 6 — OTHER FEES (FDD pages 11–15)
What This Means (2025 FDD)
According to Pearce Bespoke's 2025 Franchise Disclosure Document, "Net Sales" is defined as "Gross Sales" minus specific deductions. "Gross Sales" includes all revenues from the sale of goods and services, whether paid in cash, check, credit card, or trade, related to the franchise. This also encompasses sales made through the internet, but it is reduced by customer refunds and sales or similar taxes.
From this "Gross Sales" figure, Pearce Bespoke franchisees can deduct two items to arrive at "Net Sales". These deductions include: (i) the amount of any documented refunds and chargebacks provided to customers or retailers in good faith; and (ii) Licensor designated or approved discounts, promotions, or credits.
Understanding the definition of "Net Sales" is crucial because it serves as the basis for calculating royalty fees and other financial obligations to Pearce Bespoke. Franchisees should maintain accurate records of all deductions to ensure compliance and accurate reporting. It is also important to understand what discounts, promotions, and credits are pre-approved by Pearce Bespoke to avoid any discrepancies.