What is excluded from the definition of "Gross Sales" for a Beef O Bradys franchise?

According to Beef O Bradys's 2025 Franchise Disclosure Document, "Gross Sales" for the purposes of the franchise agreement includes all revenue derived from operating the Family Sports Pub. This encompasses all amounts received at or away from the site from any activities or services associated with the brand, regardless of the form of payment (cash, check, credit, etc.), and includes the redemption value of gift certificates. However, there are specific exclusions to this definition.

The following items are excluded from the calculation of Gross Sales: (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. These exclusions directly reduce the amount of revenue subject to royalty fees and other calculations based on Gross Sales.

For a prospective Beef O Bradys franchisee, understanding this definition is crucial because it directly impacts the calculation of royalties and other fees owed to the franchisor. By excluding taxes and customer adjustments from Gross Sales, the franchisee only pays royalties on the net revenue retained by the business. This is a fairly standard practice in franchising, as it ensures that franchisees are not paying royalties on funds they are merely collecting on behalf of government entities or refunding to customers.