What is excluded from the 'Gross Sales' calculation for 7 Brew stores?
7_Brew Franchise · 2025 FDDAnswer from 2025 FDD Document
- i. "Gross Sales" means the aggregate revenue received from selling, or providing services with respect to, beverages, food, other menu items, and merchandise, whether for cash or on credit, less (a) applicable sales taxes collected and remitted to the appropriate tax authority, (b) valid coupon credits and employee discounts deducted from revenue initially recorded as Gross Sales in an amount equal to 2% of such Gross Sales, and (c) revenue derived from selling or issuing gift cards and loyalty cards (although revenue derived from selling products and services to customers using those cards for payment is included in Gross Sales), but without deducting any other costs or expenses whatsoever.
Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 61–73)
What This Means (2025 FDD)
According to 7 Brew's 2025 Franchise Disclosure Document, the calculation of 'Gross Sales' for 7 Brew stores involves specific deductions from the aggregate revenue. Gross Sales includes revenue from beverages, food, other menu items, and merchandise, whether sold for cash or on credit. However, certain items are subtracted from this total to arrive at the final Gross Sales figure.
Specifically, the following are excluded from the Gross Sales calculation: applicable sales taxes collected and remitted to the appropriate tax authority, valid coupon credits and employee discounts (up to 2% of Gross Sales), and revenue derived from selling or issuing gift cards and loyalty cards. It is important to note that while the initial sale of gift cards and loyalty cards is excluded, revenue from customers using these cards to purchase products and services is included in Gross Sales.
This definition of Gross Sales is significant for prospective franchisees because it directly impacts the financial performance metrics presented in the Item 19 disclosures. For example, the average Gross Sales for all Measured Stores during Fiscal Year 2024 was $2,040,883. Understanding what is included and excluded from this figure is crucial for accurately assessing the potential revenue and profitability of a 7 Brew franchise. Franchisees should be aware of these exclusions when projecting their own sales and calculating key performance indicators.