What is included in the definition of 'Gross Sales' for a Spray Net franchise?
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" encompasses all revenue generated from the sale of products and services by the franchised business. This includes revenue received in any form, such as cash, credit, barter, or rebates, irrespective of whether the payment has been fully collected in the case of credit sales. The definition extends to all income related to the franchised business, including any consideration received from third-party vendors or suppliers.
However, the definition of "Gross Sales" for a Spray Net franchise specifically excludes monies collected by the franchisee for transmittal to taxing authorities. Additionally, franchisees are permitted to deduct cash refunds and the value of coupons used by customers at the time of payment, provided these amounts were initially included in the gross sales figures.
Understanding the components of "Gross Sales" is crucial for Spray Net franchisees, as it directly impacts the calculation of royalty fees and other financial obligations to the franchisor. Franchisees must accurately track and report all sales data, keeping in mind the inclusions and exclusions outlined in the Franchise Agreement to ensure compliance and avoid potential discrepancies or audit-related issues. The minimum gross sales also determine the royalty fee, which is subject to a minimum of 7% of the applicable Minimum Gross Sales.