According to Aw, what constitutes 'Gross Sales'?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
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- The term "Gross Sales" means the amount of all receipts from the sale of any and all food beverages, merchandise or other products or services made and rendered in, on or from the premises of the Papa Ray's Pizza Restaurant, or through any other means, including sales outside of the Premises, that is in any way related to your Papa Ray's Pizza Restaurant, whether for cash, exchange or credit (and regardless of collection in the case of credit). Gross Sales will be deemed received on the date that payment in whatever form is actually collected and received by you. The term Gross Sales does not include any receipts from sales, use, or service taxes collected from customers and paid to the appropriate taxing authority, promotional customer discounts and coupons, authorized employee discounts and complimentary products for promotion or charitable purposes. You must submit a weekly report of Gross Sales to us.
Source: Item 6 — OTHER FEES (FDD pages 13–16)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, Gross Sales are defined as the total income from all sales of food, beverages, merchandise, and services at the Papa Ray's Pizza Restaurant. This includes sales made on the premises or through any means related to the restaurant, such as outside sales. Gross Sales are considered received when payment is actually collected, regardless of whether it's cash, exchange, or credit. Franchisees are required to submit weekly reports of Gross Sales to Aw.
However, the definition of Gross Sales does not include certain items. Specifically, sales, use, or service taxes collected from customers and remitted to the appropriate taxing authority are excluded. Promotional customer discounts and coupons, authorized employee discounts, and complimentary products provided for promotion or charitable purposes are also not included in Gross Sales.
Understanding what constitutes Gross Sales is crucial for Aw franchisees because royalty fees and other payments to Aw are calculated based on this figure. Accurate reporting of Gross Sales is essential to avoid audits, which can result in additional costs. If an audit reveals an understatement of Gross Sales by more than 2%, the franchisee will be responsible for the cost of the audit, including professional advisor fees, travel expenses, and compensation for Aw's employees or agents involved in the audit.