Does the definition of Gross Sales for Bb.Q Chicken include income from catering?
Bb_Q_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
- 4.2.4 For the purposes of determining the Royalty Fees to be paid hereunder, "Gross Sales" shall mean the total selling price of all services and products and all income of every other kind and nature related to the Franchised Business (including, without limitation, income and fees related to catering, carry-out and to the use of third-party delivery services, and any sales or orders of food products or food preparation services provided from or related to the Franchised Business), whether for cash or credit and regardless of collection in the case of credit. In the event of a cash shortage, the amount of Gross Sales shall be determined based on the records of the electronic cash register system and any cash shortage shall not be considered in the determination. Gross Sales shall expressly exclude the following:
- (a) Receipts from the operation of any public telephone installed in the Restaurant, or products from vending machines located at the Restaurant, except for any amount representing your share of such revenues;
- (b) Sums representing sales taxes collected directly from customers, based upon present or future laws of federal, state or local governments, collected by you in the operation of the Franchised Business, and any other tax, excise or duty which is levied or assessed against you by any federal, state, municipal or local authority, based on sales of specific merchandise sold at or from the Franchised Business, provided that such taxes are actually transmitted to the appropriate taxing authority; and
- (c) Proceeds from isolated sales of trade fixtures not constituting any part of your products and services offered for resale at the Franchised Business nor having any material effect upon the ongoing operation of the Franchised Business required under this Agreement.
We may, from time to time, authorize certain additional items to be excluded from Gross Sales. Any such permission may be revoked or withdrawn at any time in writing by us in our discretion. In addition to the foregoing, the following are included within the definition of Gross Sales:
Source: Item 23 — RECEIPTS (FDD pages 62–283)
What This Means (2025 FDD)
According to Bb.Q Chicken's 2025 Franchise Disclosure Document, gross sales does include income from catering. Specifically, the FDD states that gross sales includes all income related to the franchised business, including income and fees related to catering. This means that Bb.Q Chicken franchisees must include all revenue generated from catering services when calculating their gross sales for the purpose of royalty fee payments.
This definition of gross sales also encompasses income from carry-out services and the use of third-party delivery services, as well as any sales or orders of food products or food preparation services related to the franchised business. The method of payment, whether cash or credit, does not affect the inclusion of these sales in gross sales calculations. However, cash shortages are not considered when determining the amount of gross sales, which is instead based on the records of the electronic cash register system.
There are some exclusions from the definition of gross sales for Bb.Q Chicken franchises. These exclusions include receipts from public telephones or vending machines (excluding the franchisee's share of revenues), sales taxes collected from customers that are remitted to the appropriate taxing authority, and proceeds from isolated sales of trade fixtures that do not constitute the franchisee's products or services. Bb.Q Chicken may also authorize additional exclusions from gross sales at its discretion, but it can revoke such permissions at any time in writing.