How are 'Gross Sales' defined for a Pearce Bespoke franchise?

According to Pearce Bespoke's 2025 Franchise Disclosure Document, "Gross Sales" is defined as the total revenue a franchisee receives from selling goods and services. This includes all forms of payment, whether it's cash, check, credit card, or trade, related to the franchise. However, this total is reduced by customer refunds and returns, as well as any sales or similar taxes collected. The definition explicitly includes sales made through the internet.

Understanding the definition of Gross Sales is crucial for Pearce Bespoke franchisees because it directly impacts royalty fees, local marketing expenses, and potential audit expenses. For example, franchisees must spend a minimum of 5% of their Gross Sales on local marketing. If they spend less than this amount, Pearce Bespoke may require them to pay the difference. Additionally, if an audit reveals that Gross Sales were understated by more than 2%, the franchisee will be responsible for covering the cost of the audit.

Pearce Bespoke also calculates Net Sales and Credit Card Sales, which are derived from Gross Sales. Net Sales are Gross Sales minus documented refunds, chargebacks, and licensor-approved discounts or promotions. Credit Card Sales include all revenue transacted from the business, encompassing service fees, product sales, business interruption insurance, and all amounts received, regardless of payment method. These definitions are important because Pearce Bespoke calculates and pays franchisees their Net Sales weekly, after deducting any amounts owed for the Technology Fee.