What is included in the Pearce Bespoke definition of 'Net Sales'?

According to Pearce Bespoke's 2025 Franchise Disclosure Document, "Net Sales" is defined as "Gross Sales" minus specific deductions. Gross Sales represents the total revenue received from the sale of goods and services related to the franchise, encompassing all forms of payment such as cash, checks, credit cards, or trade, but excluding customer refunds, returns, and sales or similar taxes. Gross Sales also includes any sales transacted via the internet.

The deductions from Gross Sales to arrive at Net Sales include documented refunds, chargebacks provided to customers or retailers in good faith, and licensor-designated or approved discounts, promotions, or credits. This definition is important because many fees payable to Pearce Bespoke, such as the local marketing expenses, are calculated as a percentage of Gross Sales.

Understanding the distinction between Gross Sales and Net Sales is crucial for franchisees as it directly impacts the calculation of royalties and other fees. Franchisees should ensure they maintain accurate records of all deductions, such as refunds and approved discounts, to correctly report their Net Sales and avoid potential discrepancies or disputes with Pearce Bespoke. This also affects the weekly calculation of Gross Sales, Net Sales, and Credit Card Sales, which Pearce Bespoke uses to pay the franchisee the Net Sales generated from the operation of their franchise during the previous calendar week minus the amount owed for the Technology Fee.