Are receipts from sales outside of the Premises included in the Gross Revenue calculation for an Aw franchise?

According to Aw's 2025 Franchise Disclosure Document, the definition of "Gross Revenue" includes receipts from sales made outside of the premises if they are related to the Aw restaurant. Specifically, Gross Revenue encompasses all receipts from the sale of food, beverages, merchandise, or services made in, on, or from the premises, or through any other means, including sales outside of the premises, that are related to the Papa Ray's Pizza Restaurant. This includes sales for cash, exchange, or credit, regardless of whether the credit has been collected.

However, the calculation of Gross Revenue for an Aw franchise excludes certain items. These exclusions include sales, use, or service taxes collected from customers and remitted to the appropriate taxing authority. Additionally, promotional customer discounts and coupons, authorized employee discounts, and complimentary products provided for promotional or charitable purposes are also excluded from the Gross Revenue calculation.

For a prospective Aw franchisee, this definition is important because the royalty fee and the Marketing Fund contribution are calculated as percentages of Gross Revenue. The royalty fee is 5% of Gross Revenue, and the Marketing Fund contribution is 2% of Gross Revenue. Therefore, understanding what constitutes Gross Revenue is crucial for accurately calculating and paying these fees. Franchisees must also report their Gross Sales weekly to Aw.

It is important to note that Aw has the right to inspect and audit the franchisee's business records to verify the accuracy of reported Gross Revenue. If an audit reveals an understatement of Gross Revenue, the franchisee will be required to pay the owed marketing contributions, plus interest on the understated amount. Furthermore, if the understatement exceeds 2% or if the audit was necessitated by the franchisee's failure to provide required reports, the franchisee may also be responsible for reimbursing Aw for the cost of the audit.