Does the definition of Gross Revenue for an Aw franchise include all receipts from the sale of beverages?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
- 10.4 Definition of "Gross Revenue". As used in this Agreement, the term "Gross Revenue" 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, 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), except that Gross Revenue will 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 promotional or charitable purposes.
Source: Item 22 — CONTRACTS (FDD pages 39–40)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, Gross Revenue includes receipts from beverage sales. The document defines Gross Revenue as the total amount of all receipts from the sale of any and all food, beverages, merchandise, or other products or services. This includes sales made in, on, or from the premises, or through any other means related to the Papa Ray's Pizza Restaurant, whether for cash, exchange, or credit.
However, there are some exceptions to what is included in Gross Revenue. Specifically, Gross Revenue does not include sales, use, or service taxes collected from customers and paid to the appropriate taxing authority. It also excludes promotional customer discounts and coupons, authorized employee discounts, and complimentary products for promotional or charitable purposes.
For a prospective Aw franchisee, this definition is important because the royalty fee and Marketing Fund contributions are calculated as a percentage of Gross Revenue. Therefore, understanding what constitutes Gross Revenue is essential for accurately calculating and paying these fees. Franchisees need to be aware of what sales are included and what deductions are allowed to ensure compliance with the franchise agreement.