What receipts are excluded from the definition of 'Gross Revenue' for an Aw franchise?

According to Aw's 2025 Franchise Disclosure Document, the term "Gross Revenue" is comprehensively defined for the purpose of calculating royalty fees and marketing fund contributions. Gross Revenue includes all receipts from the sale of food, beverages, merchandise, or other products and services, whether the sales occur on the premises or through any means related to the Aw restaurant, including cash, exchange, or credit transactions. This broad definition ensures that all sales channels and transaction types contribute to the revenue base on which fees are calculated.

However, the definition of Gross Revenue for an Aw franchise specifically excludes certain receipts. These exclusions include sales, use, or service taxes collected from customers and remitted to the appropriate taxing authority. Additionally, promotional customer discounts and coupons are excluded, as are authorized employee discounts and complimentary products provided for promotional or charitable purposes. These exclusions effectively reduce the revenue base on which franchisees pay royalties and marketing fund contributions, aligning these fees more closely with the actual net sales retained by the franchisee.

For a prospective Aw franchisee, understanding this definition is crucial for financial planning and accurately calculating ongoing fees. By excluding taxes, discounts, and complimentary items from Gross Revenue, Aw aims to provide a fairer basis for fee calculation. Franchisees should ensure they maintain accurate records of these exclusions to reconcile their reported Gross Revenue with the franchisor's audits and inspections, as discrepancies could lead to additional payments, interest, and even reimbursement of audit costs if underreporting exceeds two percent.