What receipts are excluded from Gross Sales calculations for an Aw franchise?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
-
- The term "Gross Sales" 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 of the Papa Ray's Pizza Restaurant, 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). Gross Sales will be deemed received on the date that payment in whatever form is actually collected and received by you. The term Gross Sales does 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 promotion or charitable purposes. You must submit a weekly report of Gross Sales to us.
Source: Item 6 — OTHER FEES (FDD pages 13–16)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, Gross Sales for royalty calculation purposes do not include certain receipts. Specifically excluded are receipts from sales, use, or service taxes that the franchisee collects from customers and then remits to the appropriate taxing authority. This means Aw franchisees do not pay royalties on the tax portion of their sales.
Additionally, Gross Sales exclude promotional customer discounts and coupons. This exclusion benefits franchisees by reducing the royalty fees owed on sales where discounts or coupons were used to attract customers. Similarly, authorized employee discounts are also excluded from Gross Sales, acknowledging that these discounts are part of employee compensation and not regular revenue.
Finally, the definition of Gross Sales excludes complimentary products provided for promotion or charitable purposes. This exclusion recognizes that these products are given away to promote the business or support charitable causes, and therefore should not be subject to royalty fees. Aw franchisees must submit a weekly report of Gross Sales to the company.