What is the definition of 'Adjusted Gross Sales' for a Beef O Bradys franchise, and what deductions are allowed?

According to Beef O Bradys's 2025 Franchise Disclosure Document, Adjusted Gross Sales is a crucial figure, as it is the base used to calculate royalty payments and marketing contributions. For a Beef O Bradys franchisee, understanding this definition is essential for accurate financial reporting and cost management. \n\nThe 2025 FDD defines "Adjusted Gross Sales" as Gross Sales less specific deductions. These deductions include: (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.\n\nBeef O Bradys retains the right to assess the reasonableness of deductions claimed by the franchisee. If Beef O Bradys determines that the amount of over-rings, allowances, and discounts to customers is excessive compared to the system-wide average, they may require the franchisee to increase their Adjusted Gross Sales by an amount they determine. This clause underscores the importance of maintaining consistent and justifiable accounting practices, as discrepancies could lead to increased financial obligations at the discretion of Beef O Bradys.