How is the Beef O Bradys Adjusted Gross Sales determined for Royalty payments?
Beef_O_Bradys Franchise · 2025 FDDAnswer from 2025 FDD Document
- 6.6 Definition of "Gross Sales." As used in this Agreement, the term "Gross Sales" means all revenue you derive from operating the Family Sports Pub, including, but not limited to, all amounts you receive at or away from the Site from any activities or services whatsoever including any that are in any way associated with the Marks, and whether from cash, check, barter, credit or debit card or credit transactions, including the redemption value of gift certificates redeemed by you regardless of whether such gift certificates are issued by you or someone else; but excluding (1) all federal, state or municipal sales, use or service taxes collected from customers and paid to the appropriate taxing authority and (2) customer refunds, adjustments, credits and allowances actually made by the Family Sports Pub.
Gross Sales also includes revenues from delivery service sales, retail, concessions, hotel room service, catering, special functions, etc. and sales of products bearing or associated with the Marks.
- 6.7 Definition of "Adjusted Gross Sales." As used in this Agreement, "Adjusted Gross Sales" means Gross Sales less: (i) complimentary food and beverage service, or sums collected and actually paid by you for any sales, drink or other excise tax imposed by any duly constituted governmental authority on alcoholic beverages sales in a state that prohibits the payment of Royalties on such sales; (ii) the value of gift certificates and the amounts paid for them; and, (iii) the amount of all reasonable over-rings, allowances, discounts to customers, tips to employees (including discounts attributable to coupon sales, provided they have been included in Gross Sales) as determined by us in our sole judgment.
If we determine in our sole judgment that the amount of over-rings, allowances, and discounts to customers is excessive as compared to the system-wide average, we may require you to increase the amount of your Adjusted Gross Sales in the amount that we determine.
Source: Item 23 — RECEIPTS. (FDD pages 66–330)
What This Means (2025 FDD)
According to Beef O Bradys's 2025 Franchise Disclosure Document, Adjusted Gross Sales is used to calculate royalty payments. Gross Sales includes all revenue derived from operating the Family Sports Pub, including revenue from activities, services, cash, checks, credit or debit card transactions, and the redemption value of gift certificates. However, Gross Sales excludes sales, use, or service taxes collected from customers and paid to the appropriate taxing authority, as well as customer refunds, adjustments, credits, and allowances actually made by the Family Sports Pub. Gross Sales also includes revenues from delivery service sales, retail, concessions, hotel room service, catering, special functions, etc. and sales of products bearing or associated with the Marks.
Adjusted Gross Sales is calculated by subtracting specific items from Gross Sales. These deductions include complimentary food and beverage service, sums collected and actually paid for sales, drink, or other excise tax imposed by any duly constituted governmental authority on alcoholic beverages sales in a state that prohibits the payment of Royalties on such sales, the value of gift certificates and the amounts paid for them, and the amount of all reasonable over-rings, allowances, discounts to customers, and tips to employees (including discounts attributable to coupon sales, provided they have been included in Gross Sales). Beef O Bradys retains the right to determine the reasonableness of these deductions.
Beef O Bradys, in its sole judgment, can determine if the amount of over-rings, allowances, and discounts to customers is excessive compared to the system-wide average. If so, Beef O Bradys may require the franchisee to increase the amount of their Adjusted Gross Sales by an amount they determine. This gives Beef O Bradys significant control over the Adjusted Gross Sales figure used to calculate royalties, potentially impacting the franchisee's royalty obligations.