Are gift card purchases included in Baya Bar's Gross Revenue at the time of purchase?

According to Baya Bar's 2024 Franchise Disclosure Document, gift card purchases are not included in gross revenue at the time of purchase. However, the gross revenue does include the redemption amount of purchases made using gift cards.

This means that Baya Bar franchisees will not pay royalties or brand fund contributions on the initial sale of a gift card. Instead, these fees are collected when the gift card is used to make a purchase at the Baya Bar location. This policy ensures that the franchisee only pays fees on actual sales of goods and services.

For a prospective Baya Bar franchisee, this distinction is important for financial planning and revenue tracking. Franchisees must accurately track both gift card sales and redemptions to properly report gross revenue and calculate royalty and brand fund contribution payments. This also affects cash flow, as the revenue from gift card sales is not immediately subject to these deductions.