How is 'gross sales' defined for a B Bops franchise?
B_Bops Franchise · 2025 FDDAnswer from 2025 FDD Document
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 defined as the total income from all sales of food, drinks, and promotional items. This includes all income, receipts, and revenues, whether in cash or credit, that the franchisee receives directly or indirectly from the B Bops franchise. It also encompasses revenues from the sale of any product or service not included in the Licensed System, but for which B Bops has given its consent.
However, the definition of gross sales for a B Bops franchise specifically excludes sales or other taxes imposed by any government authority (federal, state, or municipal) that are directly levied on sales and collected from customers, provided that the tax amount is added to the selling price or absorbed within it and is actually paid by the franchisee to the relevant governmental authority.
This definition is important because B Bops calculates both the monthly royalty and service fee (5%) and the advertising fee (3%) based on a percentage of gross sales. Therefore, understanding what constitutes gross sales is crucial for a franchisee to accurately calculate and report these fees. Franchisees must provide B Bops with a gross sales report each month, so clarity on this definition is essential for compliance and financial planning.