What is excluded from the definition of 'Net Revenues' for a Bambu franchise?
Bambu Franchise · 2025 FDDAnswer from 2025 FDD Document
The term "Net Revenues" shall mean the total gross revenue derived by Franchisee from the operation of its Bambū shoppe, whether from sales for cash or credit, and irrespective of the collection thereof, including sales of both merchandise and services, but exclusive of all sales taxes, use taxes, gross receipts taxes, and other similar taxes added to the sales price and collected from the customer, and less any bona fide refunds, rebates, discounts, and tips.
Source: Item 23 — Receipts (FDD pages 52–209)
What This Means (2025 FDD)
According to Bambu's 2025 Franchise Disclosure Document, Net Revenues are defined as the total gross revenue a franchisee derives from operating their Bambu shop. This includes all sales for cash or credit, regardless of whether the franchisee has actually collected the revenue. It encompasses sales of both merchandise and services offered at the shop.
However, the definition of Net Revenues specifically excludes certain items. These exclusions include all sales taxes, use taxes, gross receipts taxes, and other similar taxes that are added to the sales price and collected from customers. Additionally, any bona fide refunds, rebates, discounts, and tips are subtracted from the total gross revenue to arrive at the Net Revenues figure.
Understanding this definition is crucial for Bambu franchisees because the royalty fee, which is 3.5% of Net Revenues, is calculated based on this figure. Therefore, accurately tracking and reporting revenue, while properly accounting for exclusions like taxes and refunds, is essential for compliance with the franchise agreement and for calculating royalty payments.