What sales are excluded from the definition of 'Gross Sales' for a Bananas Smoothies Frozen Yogurt restaurant?
Bananas_Smoothies_Frozen_Yogurt Franchise · 2025 FDDAnswer from 2025 FDD Document
The term "Gross Sales" means all revenues generated by the Restaurant conducted upon, from or with respect to the Restaurant, whether such sales are evidenced by cash, check, credit, charge, account or exchange. Gross Sales includes, without limitation, monies or credit received from the sale of food and merchandise, from tangible property of every kind and nature, promotional or otherwise, and for services performed from or at the Restaurant, including without limitation such off-premises services as catering and delivery. Gross Sales does not include the sale of food or merchandise for which refunds have been made in good faith to customers, nor does it include sales, meals, use or excise tax imposed by a governmental authority directly on sales and collected from customers; provided that the amount for such tax is added to the selling price or absorbed therein, and is actually paid by the owner to such governmental authority.
Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 52–54)
What This Means (2025 FDD)
According to the 2025 Bananas Smoothies Frozen Yogurt Franchise Disclosure Document, 'Gross Sales' encompasses all revenues generated by the restaurant from any transaction, including cash, credit, or exchange. This includes sales of food, merchandise, tangible property, and services, including off-premises services like catering and delivery.
However, the definition of Gross Sales for a Bananas Smoothies Frozen Yogurt restaurant specifically excludes certain transactions. These exclusions are for the sale of food or merchandise for which refunds have been made in good faith to customers. Additionally, sales, meals, use, or excise taxes imposed by a governmental authority directly on sales and collected from customers are also excluded, provided that the tax amount is either added to the selling price or absorbed within it, and is actually remitted to the governmental authority by the restaurant owner.
For a prospective Bananas Smoothies Frozen Yogurt franchisee, understanding this definition is crucial for accurate financial reporting and royalty calculations. Franchisees should ensure their accounting practices properly track and exclude these items from their gross sales figures to avoid overpayment of royalties and to maintain compliance with the franchise agreement.