How is 'Gross Revenue' defined for an Aw franchise?
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 is defined as the total amount of all income from the sale of food, drinks, merchandise, services, or other products made in or from the premises, or through any other means related to the Papa Ray's Pizza Restaurant. This includes sales made for cash, exchange, or credit, regardless of whether the payment has been collected for credit sales.
However, the definition of Gross Revenue for Aw excludes certain items. Specifically, it does not include any receipts from sales, use, or service taxes that are collected from customers and then paid to the appropriate taxing authority. Additionally, promotional customer discounts and coupons, authorized employee discounts, and complimentary products offered for promotional or charitable purposes are also excluded from the Gross Revenue calculation.
This definition is important for franchisees because the royalty fee and the contribution to the National Marketing Fund are calculated as percentages of Gross Revenue. Specifically, the franchisee pays a weekly royalty fee of 5% of Gross Revenue and contributes 2% of Gross Revenue to the Marketing Fund. Accurately calculating and reporting Gross Revenue is therefore essential for determining these payments and avoiding potential discrepancies or penalties from Aw.