For Auntie Annes, what is included in the definition of 'Net Sales'?
Auntie_Annes Franchise · 2024 FDDAnswer from 2024 FDD Document
"Net Sales" means all revenues generated by your Shop or conducted from or with respect to the Shop, whether the sales are evidenced by cash, check, credit, charge, account, barter or exchange.
Net Sales includes monies, gift card redemptions, or credit generated by or received from (i) the sale of Approved Products or tangible property of every kind and nature, promotional or otherwise, anywhere and (ii) services performed from, at, or in connection with the Shop, including (x) off-premises services (such as catering and delivery), (y) on-premises services (such as games, gambling machines, or third-party advertising within the Shop), or (z) any other services or activities that use either the System, the Marks, or products that are the same as or similar to the Approved Products.
The foregoing list is not intended to provide approval for such activities, which may be conducted only if approved.
Unless we specify otherwise in writing, Net Sales shall include all ancillary charges or fees, including delivery fees and other service charges, that are paid to you by a customer or by a third-party delivery or catering service (e.g., Uber Eats, Postmates, Grubhub, ezCater, or DoorDash) (a "TPS") in connection with delivery or catering services related to your Shop (recognizing that though the TPS may pay you an amount equal to the purchase price charged to the customer less a commission, other fees, and any discounts, credits, or coupons applied to that order, such commission, fees, discounts, credits, and coupons will not be deducted from your Net Sales).
Net Sales will not include (a) the initial sales or reloading of gift cards, (b) discounts, (c) the sale of food or merchandise for which refunds have been made in good faith to customers, (d) the discounted portion of employee meals, (e) sales, meals, use or excise tax imposed by a governmental authority directly on sales and collected from customers, provided that the amount for the tax is added to the selling price or absorbed therein and is actually paid by you to a governmental authority, (f) the sale of equipment used in the operation of the Shop, or (g) tips.
Net Sales includes sales made from an SRU.
Source: Item 6 — OTHER FEES (FDD pages 30–44)
What This Means (2024 FDD)
According to Auntie Annes's 2024 Franchise Disclosure Document, "Net Sales" encompasses all revenues generated by the shop, irrespective of the payment method, including cash, check, credit, charge, account, barter, or exchange. This broad definition ensures that all income streams are accounted for when calculating royalties and other fees. Net Sales also includes sales made from an SRU.
Specifically, Net Sales includes monies, gift card redemptions, or credit generated by the sale of approved products or tangible property and services performed at the shop, including off-premises services like catering and delivery, and on-premises services like games or third-party advertising. This inclusive approach captures various revenue-generating activities that contribute to the overall financial performance of the Auntie Annes franchise.
The definition of Net Sales also incorporates ancillary charges or fees, such as delivery fees and other service charges, paid by customers or third-party delivery services like Uber Eats or DoorDash. Even if these third-party services deduct commissions, fees, discounts, credits, or coupons, these deductions are not subtracted from the franchisee's Net Sales. This ensures that Auntie Annes franchisees pay royalties on the full amount charged to the customer, before any deductions by third-party services.
However, Net Sales does not include (a) the initial sales or reloading of gift cards, (b) discounts, (c) the sale of food or merchandise for which refunds have been made in good faith to customers, (d) the discounted portion of employee meals, (e) sales, meals, use or excise tax imposed by a governmental authority directly on sales and collected from customers, provided that the amount for the tax is added to the selling price or absorbed therein and is actually paid by you to a governmental authority, (f) the sale of equipment used in the operation of the Shop, or (g) tips.