What revenues are included in the Gross Sales calculation for a Precision Door Service franchise?
Precision_Door_Service Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Gross Sales. Gross Sales include the total revenues and receipts from whatever source (whether in the form of cash, credit, agreement to pay, barter, trade or other consideration) that arise, directly or indirectly, from the operation of — or in connection with — your Business whether under any of the Marks or otherwise. Gross Sales exclude sales taxes collected from customers and paid to the appropriate taxing authority and any other bona fide refunds, rebates or discounts that we authorize in writing. Gross Sales also exclude sales from any Excluded Services (as defined in a mutually executed Excluded Services Addendum (see Schedule I to the Franchise Agreement). The Excluded Services Addendum requirements include that (i) the operation of the Existing Business does not interfere with your operation of the Business; (ii) you do not utilize our Marks, System and Confidential Information in the operation of the Existing Business; (iii) the Existing Business offers only the Excluded Services (the gross sales of which are excluded from the Gross Sales of the Business) specifically identified in the Excluded Services Addendum, which are services specified by us that are related to but distinguishable from the services of your Business, and does not compete with the Business by offering the same services and/or products as the Business; and (iv) you maintain separate books and records for each of the Business and the Existing Business. You must agree to make the books and records for your Existing Business available to us on reasonable prior written notice so that we may verify your compliance with the requirement concerning separate books and records.
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- Minimum Local Marketing Spending; Local Marketing Group/Advertising Cooperatives. You must spend an amount annually on approved local marketing and advertising of your Business (the "Minimum Local Marketing Spending") equal to the greater of: (a) $20,000; or (b) 8% of your Gross Sales for the previous year.
Source: Item 6 — OTHER FEES (FDD pages 28–36)
What This Means (2025 FDD)
According to Precision Door Service's 2025 Franchise Disclosure Document, Gross Sales encompass the total revenues and receipts, irrespective of the source or form of payment, that are directly or indirectly derived from the operation of the franchised business. This includes revenues generated under the Precision Door Service marks or otherwise. Essentially, all income streams connected to the business's operations are factored into the Gross Sales calculation.
However, there are specific exclusions from Gross Sales. These exclusions include sales taxes collected from customers that are then remitted to the appropriate taxing authority. Additionally, any bona fide refunds, rebates, or discounts that Precision Door Service authorizes in writing are also excluded from the Gross Sales calculation. Furthermore, sales from any Excluded Services, as defined in a mutually executed Excluded Services Addendum, are not included in Gross Sales.
The Excluded Services Addendum outlines specific requirements for excluding certain services from the Gross Sales calculation. These requirements include ensuring that the operation of any existing business does not interfere with the Precision Door Service franchise, that the franchise's Marks, System, and Confidential Information are not used in the existing business, and that the existing business offers only services specifically identified in the addendum that are distinguishable from the franchise's services. Maintaining separate books and records for both the franchise and the existing business is also mandatory. Precision Door Service retains the right to inspect the books and records of the existing business to verify compliance with these requirements.
For a prospective Precision Door Service franchisee, understanding the inclusions and exclusions in the Gross Sales calculation is crucial. Gross Sales directly impact the monthly license fees payable to Precision Door Service, as well as the amount required to be spent on local marketing. Therefore, accurately tracking and reporting Gross Sales is essential for financial compliance and operational planning.