Does the B Bops definition of gross sales include revenues from all sources?
B_Bops Franchise · 2025 FDDAnswer from 2025 FDD Document
- D. Definition of Gross Sales. For purposes of this Agreement, the term "gross sales" shall be defined to mean the aggregate amount of all sales of food, beverage and promotional items generated by the Franchise and shall include all sales, receipts and revenues in any form and from any and all sources whatsoever, directly or indirectly received by Franchisee as a result of the Franchise, whether for cash or credit and regardless of collection in the case of credit. The term "gross sales" shall also include all revenues derived from the sale of any product or service not included in the Licensed System, but for which Company has given its consent. The term "gross sales" shall not include the amount of any sales or other tax imposed by any federal, state, municipal or other governmental authority directly on sales and collected from patrons, provided that the amount of such tax is added to the selling price or otherwise absorbed therein and actually paid by Franchisee to such governmental authority.
Source: Item 22 — CONTRACTS (FDD page 53)
What This Means (2025 FDD)
According to B Bops's 2025 Franchise Disclosure Document, gross sales are comprehensively defined to include revenues from virtually all sources. This is important because several fees payable to B Bops are calculated as a percentage of gross sales.
The definition includes the aggregate amount of all sales of food, beverage, and promotional items generated by the franchise. This encompasses all sales, receipts, and revenues, irrespective of the form they take (cash or credit) and whether or not payment has been collected for credit sales. Furthermore, gross sales include revenues from the sale of any product or service not typically included in the B Bops Licensed System, provided that B Bops has given its consent for the sale of such items.
The only exclusion from the gross sales definition is the amount of any sales or other tax imposed by a governmental authority that is directly on sales and collected from patrons, provided that the amount of such tax is added to the selling price and actually paid by the franchisee to the governmental authority. This means that franchisees will pay royalties and advertising fees on almost all revenue streams, so understanding what constitutes gross sales is crucial for financial planning.