Does the definition of Gross Revenue for an Aw franchise include all receipts from the sale of merchandise?
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 merchandise sales. The document defines Gross Revenue as the total amount of all receipts from the sale of food, beverages, merchandise, or other products and services. These sales must be 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, the definition of Gross Revenue for Aw does have some exceptions. Gross Revenue does not include sales, use, or service taxes collected from customers and remitted to the appropriate taxing authority. Promotional customer discounts and coupons are also excluded from Gross Revenue, as are authorized employee discounts and complimentary products offered for promotional or charitable purposes.
For a prospective Aw franchisee, this definition of Gross Revenue is important because it is the basis for calculating royalty fees and marketing fund contributions. By understanding what is and is not included in Gross Revenue, franchisees can accurately calculate their payments to Aw and avoid potential discrepancies or disputes. Franchisees should pay close attention to the exclusions to ensure accurate reporting and compliance with the franchise agreement.