What is included in the definition of 'Gross Revenue' 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 receipts from all sales of food, beverages, merchandise, products, and services. This includes sales made in, on, or from the premises of the Papa Ray's Pizza Restaurant, as well as any sales related to the restaurant made through other means, including those occurring outside the physical location. Gross Revenue encompasses all transactions, whether they are conducted via cash, exchange, or credit, irrespective of whether payment has been collected for credit transactions.
However, the definition of Gross Revenue for an Aw franchise specifically excludes certain items. These exclusions include receipts from sales, use, or service taxes that are collected from customers and then remitted to the appropriate taxing authorities. Additionally, Gross Revenue does not include promotional customer discounts and coupons, authorized employee discounts, and complimentary products provided for promotional or charitable purposes.
For a prospective Aw franchisee, understanding this definition is crucial because the royalty fee and Marketing Fund contributions are calculated as a percentage of Gross Revenue. Accurately tracking and reporting Gross Revenue is essential for compliance with the franchise agreement and for determining the financial obligations to the franchisor. Franchisees must ensure they correctly account for all sales and properly exclude any allowable deductions to avoid discrepancies in their payments.