What is included in 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, 'Gross Sales' for the purpose of financial performance representations includes the aggregate revenue from selling beverages, food, other menu items, and merchandise, whether the payment is in cash or credit. However, there are some deductions from this revenue.
Specifically, the gross sales calculation deducts (a) applicable sales taxes collected and remitted to the appropriate tax authority, ensuring that the reported revenue does not include taxes that are passed through to the government. It also deducts (b) valid coupon credits and employee discounts, but these are capped at 2% of gross sales. Lastly, it deducts (c) revenue derived from selling or issuing gift cards and loyalty cards.
Importantly, the revenue derived from products and services purchased using those gift cards and loyalty cards is included in gross sales. This provides a more accurate picture of the store's overall sales performance, as it reflects actual customer spending rather than just the initial sale of the cards. No other costs or expenses are deducted from gross sales, providing a comprehensive view of revenue before accounting for operational costs.