What sales taxes are excluded from the 'Gross Sales' calculation for an Angry Chickz restaurant?
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.
Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 48–51)
What This Means (2025 FDD)
According to Angry Chickz's 2025 Franchise Disclosure Document, the calculation of "Gross Sales" excludes specific types of sales taxes. These exclusions apply to sums representing sales taxes collected directly from customers, as well as any sales, value-added, or other taxes, excises, or duties charged to customers. These taxes must be levied or assessed against the franchisee by any Federal, state, municipal, or local authority and based on sales of specific goods, products, merchandise, or services sold or provided at or from the Angry Chickz restaurant. A critical condition for this exclusion is that these taxes must be actually transmitted to the appropriate governmental authority.
This means that when an Angry Chickz franchisee reports their gross sales, they do not need to include the amounts they collected specifically for sales taxes, provided they remit those taxes to the correct government entity. This is a standard practice in franchising and business in general, as sales taxes are pass-through funds and not considered revenue for the business. This exclusion provides a clearer picture of the actual revenue generated by the restaurant's sales of food and services.
It is important for prospective Angry Chickz franchisees to understand this definition of Gross Sales, as it is used in various calculations within the franchise agreement, including royalty payments and financial performance representations. Accurately tracking and reporting sales taxes is essential for compliance and for understanding the true financial performance of the franchise. Franchisees should consult with a financial professional to ensure they are properly accounting for and reporting sales taxes in accordance with all applicable laws and regulations.