What deductions are Spray Net franchisees permitted to take from Gross Sales?
Spray_Net Franchise · 2025 FDDAnswer from 2025 FDD Document
- Gross Sales. "Gross Sales" shall include all revenue from the sale of all products and performance of services from the Franchised Business, whether in the form of cash, credit, barter or rebates, and regardless of collection in the case of credit, and income of every kind and nature related to the Franchised Business, including any consideration that Franchisee receives from third-party vendors/suppliers. "Gross Sales" from customers shall not include monies that are collected and submitted by Franchisee for transmittal to the appropriate taxing authority. In computing the Gross Sales, Franchisee shall be permitted to deduct the amount of cash refunds to, and coupons used by customers at the time the balance is fully paid to Franchisee, if such amounts have been included in Gross Sales of the Franchised Business. Your Minimum Gross Sales, which are based on the number of Designated Territories you purchase and the length of time your Franchised Business has been in operation, are below. Your Royalty Fee is subject to a minimum equal to 7% of the applicable Minimum Gross Sales below.
Source: Item 6 — > **ITEM 6 OTHER FEES (FDD pages 15–29)
What This Means (2025 FDD)
According to Spray Net's 2025 Franchise Disclosure Document, Gross Sales include all revenue from the sale of products and services, whether in cash, credit, barter, or rebates, and all income related to the franchised business, including consideration from third-party vendors. However, franchisees do not have to include monies collected for transmittal to taxing authorities in their Gross Sales.
Spray Net franchisees are permitted to deduct two specific items when calculating Gross Sales: cash refunds to customers and the value of coupons used by customers at the time the balance is fully paid. These deductions are allowed only if the amounts were initially included in the Gross Sales of the franchised business.
This definition of Gross Sales and the allowable deductions are important because several fees payable to Spray Net, such as the royalty fee and the contribution to the Brand Development Fund, are calculated as a percentage of Gross Sales. Therefore, accurately calculating Gross Sales, with appropriate deductions, directly impacts the amount of these fees that a franchisee must pay.