For a B Bops franchise, what is included in the definition of 'Gross sales'?
B_Bops Franchise · 2025 FDDAnswer from 2025 FDD Document
- 2 "Gross sales" means the aggregate amount of sales of food, beverage and promotional items generated by the Franchise and includes all sales, receipts and revenues in any form and from any and all sources whatsoever, directly or indirectly, received through operation of the Franchise, whether for cash or credit and regardless of collection in the case of credit. "Gross sales" does not include the amount of any sales or other taxes imposed by any governmental authority directly on sales and collected from customers, provided that the amount of such tax is added to the selling price or otherwise absorbed therein and actually paid to such governmental authority.
Source: Item 6 — OTHER FEES (FDD pages 14–18)
What This Means (2025 FDD)
According to B Bops's 2025 Franchise Disclosure Document, gross sales are defined as the total income generated by the franchise. This includes all sales, receipts, and revenues from food, beverages, and promotional items. The sales can be in any form, whether cash or credit, and from any source related to the franchise's operation. The gross sales figure is used to calculate royalty fees and advertising expenditures.
However, the definition of gross sales for a B Bops franchise specifically excludes sales taxes or other taxes imposed by a governmental authority that are directly levied on sales and collected from customers. To qualify for this exclusion, the tax amount must be added to the selling price or otherwise included within it, and the franchisee must actually remit the tax to the appropriate governmental authority.
Understanding the components of gross sales is crucial for a prospective B Bops franchisee because it directly impacts the royalty and advertising fees. The royalty fee is 5% of gross sales, payable monthly, and the independent advertising expenditure is 2% of gross sales, payable quarterly. Therefore, accurately tracking and reporting gross sales is essential for compliance and financial planning.