Are promotional customer discounts and coupons included in the Gross Revenue calculation 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, promotional customer discounts and coupons are explicitly excluded from the calculation of Gross Revenue. Gross Revenue for Aw includes all receipts from the sale of food, beverages, merchandise, or services, whether paid in cash, exchange, or credit, related to the Papa Ray's Pizza Restaurant. This encompasses sales made on the premises or through other means, including outside sales.
However, the definition of Gross Revenue specifically excludes receipts from sales, use, or service taxes collected from customers and remitted to the appropriate taxing authority. It also excludes authorized employee discounts and complimentary products offered for promotional or charitable purposes, in addition to promotional customer discounts and coupons.
This definition is important for Aw franchisees because the royalty fee, which is 5% of Gross Revenue, and the National Marketing Fund contribution, which is 2% of Gross Revenue, are calculated based on this amount. By excluding promotional discounts and coupons from Gross Revenue, Aw franchisees do not have to pay royalty fees or marketing fund contributions on the discounted portions of their sales. This can help to improve the profitability of promotional offers and reduce the overall cost of these fees.