Are sales taxes 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, Gross Revenue does not include sales, use, or service taxes collected from customers and paid to the appropriate taxing authority. Gross Revenue also excludes promotional customer discounts and coupons, authorized employee discounts, and complimentary products for promotional or charitable purposes.
Aw franchisees are required to pay a weekly royalty fee of 5% of Gross Revenue and contribute 2% of Gross Revenue to the National Marketing Fund. These fees are calculated based on the reported Gross Revenue for the period from Monday through Sunday and are payable every Wednesday via electronic transfer.
Franchisees must submit a weekly report of Gross Sales to Aw by Tuesday of each week. Aw also has the right to audit the franchisee's business records, including sales and income tax records, to verify the accuracy of reported Gross Revenue. This ensures that royalty and marketing fund contributions are calculated correctly, benefiting both Aw and its franchisees.