For Aw franchises, when are Gross Sales considered 'received'?

According to Aw's 2025 Franchise Disclosure Document, Gross Sales are considered 'received' on the date that payment, in any form, is actually collected by the franchisee. Gross Sales encompass all receipts from the sale of food, beverages, merchandise, or services from the Papa Ray's Pizza Restaurant, including sales outside the premises related to the restaurant, regardless of whether the payment is in cash, exchange, or credit. This definition is important because Aw franchisees must submit weekly reports of Gross Sales, which are used to calculate royalty fees and advertising contributions.

However, the definition of Gross Sales excludes certain items. Specifically, receipts from sales, use, or service taxes collected from customers and remitted to the appropriate taxing authority are excluded. Additionally, promotional customer discounts and coupons, authorized employee discounts, and complimentary products for promotion or charitable purposes are not included in Gross Sales. This distinction is crucial for franchisees to accurately calculate and report their Gross Sales, ensuring they are not overpaying on royalties and advertising fees.

In practical terms, this means an Aw franchisee must track the date they physically receive payment for all sales, regardless of the payment method. For credit sales, Gross Sales are recognized when the credit payment is actually received, not when the sale is made. This could impact the timing of revenue recognition and the calculation of fees owed to Aw. Franchisees should maintain meticulous records of all sales and payments to ensure accurate reporting and avoid potential discrepancies or disputes with Aw.