Are commissions paid to third-party delivery applications deducted from Angry Chickz's Gross Sales?
Angry_Chickz Franchise · 2025 FDDAnswer from 2025 FDD Document
Notwithstanding the foregoing, "Gross Sales" shall: (i) be calculated before reduction of any amounts (whether fees or expenses) from any third-party order or delivery applications, platforms, marketplaces, or the like, and other persons or vendors that may collect funds from a customer and remit a balance to you, unless we specify otherwise; and (ii) exclude the following: (1) sums representing sales taxes collected directly from customers by you in the operation of your Restaurant, and any sales, value added or other tax, excise or duty charged to customers which is levied or assessed against you by any Federal, state, municipal or local authority, based on sales of specific goods, products, merchandise or services sold or provided at or from your Restaurant, provided that such taxes are actually transmitted to the appropriate governmental authority; (2) tips or gratuities paid to employees; (3) proceeds from isolated sales of furniture, fixtures and equipment (other than inventory); (4) bona fide refunds paid to customers (subject to any limitations in the Manuals); (5) uncollectible amounts, provided that uncollectible amounts cannot exceed 0.5% of Gross Sales in any fiscal year and subsequent collections of such amounts shall be included in Gross Sales when collected; and (6) and the retail price of any gift certificates and vouchers when sold but not yet redeemed.
No deduction is made for commissions paid to any third-party order or delivery applications, platforms, marketplaces, or the like.
The tables above present the unaudited gross sales information for each affiliate owned store.
The source of the data is the records of these affiliate-owned stores.
These affiliate owned stores are operated in the same manner as franchised stores will operate.
No franchised stores are included because our first franchised store opened in calendar year 2024 and we do not have adequate data to include for that store.
Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 48–51)
What This Means (2025 FDD)
According to Angry Chickz's 2025 Franchise Disclosure Document, commissions paid to third-party delivery applications are not deducted from gross sales. The FDD specifies that Gross Sales are calculated before any reductions for fees or expenses from third-party order or delivery applications. This means that the total revenue generated by an Angry Chickz location before subtracting these commission expenses is used to calculate Gross Sales.
For a prospective Angry Chickz franchisee, this is important because the reported Gross Sales figures, such as those presented in Table 1, do not reflect deductions for third-party delivery commissions. Franchisees should factor in these commission expenses when evaluating the potential profitability of an Angry Chickz franchise. Understanding this distinction is crucial for accurately assessing the financial performance of the business.
Furthermore, the FDD defines "Gross Sales" as the gross selling price of all goods and services sold, including revenues received in various forms such as cash, credit, gift card redemptions, or barter. It also includes delivery and/or catering fees and service charges. However, it excludes sales taxes collected from customers, tips paid to employees, proceeds from isolated sales of furniture, bona fide refunds to customers, uncollectible amounts (up to 0.5% of Gross Sales), and the retail price of gift certificates when sold but not yet redeemed. This comprehensive definition ensures that franchisees understand what constitutes Gross Sales for reporting and royalty calculation purposes.
In summary, an Angry Chickz franchisee should be aware that the Gross Sales figures presented in the FDD are pre-deduction for third-party delivery commissions. Therefore, it is essential to consider these expenses separately when projecting earnings and managing the financial aspects of the franchise.