For Angry Chickz, are 'Gross Sales' calculated before or after the reduction of fees from third-party delivery applications?
Angry_Chickz Franchise · 2025 FDDAnswer from 2025 FDD Document
rrently being offered in this state.
- (2) "Gross Sales" means the gross selling price of all goods and services sold or provided in or from your Restaurant, including the total of all revenues received or receivable by you as payment, whether in cash, for credit, redemption of gift cards (or the like), or barter or received as donation, or other means of exchange (and, if for credit or barter, whether or not payment is received therefor), on account of any and all goods, merchandise, services or products sold or provided in or from your Restaurant or which are promoted or sold under any of the Marks, whether or not we have authorized such goods or services to be offered and sold, including; (a) delivery and/or catering fees, service charges, and the like (except service charges disclosed as gratuities and actually paid to employees); (b) revenues from sales of any nature or kind whatsoever, derived by you or by any other person or entity from your Restaurant; (c) revenues from sales of all products or services at your Restaurant, whether in compliance or in contravention of the franchise agreement; and (d) the proceeds of any business interruption insurance, after the satisfaction of any applicable deductible (but assuming the full gross revenues achievable by Franchisee). 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);
Source: Item 6 — OTHER FEES1 (FDD pages 11–15)
What This Means (2025 FDD)
According to Angry Chickz's 2025 Franchise Disclosure Document, Gross Sales are calculated before any deductions for fees from third-party delivery applications. This means that the royalty fee, which is 6% of Gross Sales, is based on the total revenue before subtracting these fees. However, Angry Chickz's current policy allows franchisees to deduct 100% of commission fees paid to authorized third-party marketplace services from Gross Sales when calculating royalties. This policy may change with six months' prior notice, at which point Angry Chickz will begin collecting Continuing Royalty on such commissions.
For a prospective Angry Chickz franchisee, this means that initially, the royalty payments will not include the commission fees paid to third-party delivery services, effectively lowering the royalty burden. However, it's crucial to understand that Angry Chickz reserves the right to change this policy with a six-month notice. If the policy changes, the royalty payments will increase, impacting the franchisee's profitability.
It is important for potential franchisees to factor in the possibility of this policy change when projecting their earnings. They should also confirm with Angry Chickz which third-party marketplaces are authorized, as deductions are only permitted for commissions paid to these authorized services. This detail is essential for accurate financial planning and understanding the potential future costs associated with the franchise.