What is excluded from 'Gross Sales' when calculating fees for a Spray Net franchise?
Spray_Net Franchise · 2025 FDDAnswer from 2025 FDD Document
As used in this Agreement, "Gross Sales" include all: (a) revenue from the sale of all products and performance of services from the Franchised Business, whether for cash, credit or barter, and regardless of collection in the case of credit, and income of every kind and nature related to the Franchised Business; and (b) any rebates or other consideration that Franchisee receives from third-party vendors/suppliers. "Gross Sales" from customers will not include monies that are collected and submitted by Franchisee for the transmittal to the appropriate taxing authority.
In computing the Gross Sales, the Franchisee shall be permitted to deduct the amount of cash refunds to, and coupons used by customers at or prior to the time the customer has paid the full balance owed to Franchisee, provided such amounts have been included in sales.
In the event Franchisee participates in any discount program, including but not limited to Groupon (which Franchisor must approve in writing), Gross Sales will include the full retail value of the goods or services rendered to the customer before any discounts or commission.
Source: Item 23 — RECEIPTS (FDD pages 75–219)
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, or barter, and any rebates received from third-party vendors. However, the document specifies certain exclusions from the calculation of Gross Sales for the purpose of determining fees.
Specifically, monies collected by the Spray Net franchisee for transmittal to the appropriate taxing authority are excluded from Gross Sales. Additionally, the amount of cash refunds to customers and the value of coupons used by customers at or prior to the time the customer has paid the full balance owed to the franchisee can be deducted, provided these amounts were initially included in sales.
It's important to note that if a Spray Net franchisee participates in any discount program, including Groupon, the Gross Sales will include the full retail value of the goods or services rendered before any discounts or commissions, meaning the discount amount is not excluded from the Gross Sales calculation. This definition of Gross Sales is important because the royalty fee is calculated as seven percent of Gross Sales, and the Business Management Software fee includes 0.25% of monthly Gross Sales.