What is the definition of "Adjusted Gross Sales" for a Beef O Bradys franchise?
Beef_O_Bradys Franchise · 2025 FDDAnswer from 2025 FDD Document
- 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 defined as Gross Sales less specific deductions. Gross Sales encompasses all revenue derived from operating the Family Sports Pub, including revenue from activities and services associated with the Marks, whether received in cash, check, credit, debit card, or credit transactions, and the redemption value of gift certificates.
Specifically, Adjusted Gross Sales is calculated by subtracting the following from Gross Sales: (i) complimentary food and beverage service, or sums collected and actually paid 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 Beef O Bradys in their sole judgment.
It's important to note that Beef O Bradys retains the right to assess whether the amounts of over-rings, allowances, and discounts are excessive compared to the system-wide average. If deemed excessive, Beef O Bradys may require the franchisee to increase their Adjusted Gross Sales by an amount they determine. This provision gives Beef O Bradys discretion over the final Adjusted Gross Sales figure, which directly impacts royalty payments and other financial obligations for the franchisee.