When are gift card redemptions included in Gross Revenue for a Baya Bar franchise?

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 redemption amount of purchases made using gift cards is included in gross revenue. This means that when a customer uses a Baya Bar gift card to pay for their order, the amount redeemed from the gift card counts towards the franchise's gross revenue for that period.

For a prospective Baya Bar franchisee, this distinction is important for calculating royalties and brand fund contributions, which are based on a percentage of gross revenue. The franchisee only pays a percentage of the amount when the gift card is redeemed, not when it is initially purchased. This can affect the timing of revenue recognition and associated payments to the franchisor.

Franchisees must furnish a Gross Revenue Report to Baya Bar on the Tuesday following the close of each calendar week (Monday through Sunday). This report should accurately reflect the gross revenue, including gift card redemptions, during that period. Failure to accurately report gross revenue can result in penalties, such as paying 120% of the last royalty fee payable, until the revenues are reconciled.