What is included in the definition of 'Adjusted Gross Sales' for a Beef O Bradys franchise?
Beef_O_Bradys Franchise · 2025 FDDAnswer from 2025 FDD Document
The term "Adjusted Gross Sales" means Gross Sales less: (1) 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 the sales; (2) the value of gift certificates and the amounts paid for them; and, (3) the amount of all reasonable over-rings, allowances, discounts to customers, tips to employees (including discounts attributable to coupon sales as determined by us in our sole judgment, provided they have been included in Gross Sales). If we determine in our sole judgment 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 we determine.
Source: Item 6 — OTHER FEES. (FDD pages 12–19)
What This Means (2025 FDD)
According to Beef O Bradys's 2025 Franchise Disclosure Document, 'Adjusted Gross Sales' is a key figure used to calculate royalty and marketing fund contribution fees. For a Beef O Bradys franchise, Adjusted Gross Sales starts with the 'Gross Sales' amount, which encompasses all revenue derived from operating the Family Sports Pub. This includes all income from activities and services, whether received in cash, check, credit, or other forms, and includes the redemption value of gift certificates. Certain items are then subtracted from Gross Sales to arrive at Adjusted Gross Sales.
The 2025 FDD specifies that the following items are deducted from Gross Sales to calculate Adjusted Gross Sales: (1) 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 the sales; (2) the value of gift certificates and the amounts paid for them; and, (3) the amount of all reasonable over-rings, allowances, discounts to customers, tips to employees (including discounts attributable to coupon sales as determined by us in our sole judgment, provided they have been included in Gross Sales).
Beef O Bradys retains some discretion over the calculation of Adjusted Gross Sales. Specifically, 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 the amount of their Adjusted Gross Sales by an amount they determine. This provision gives Beef O Bradys the ability to adjust a franchisee's reported sales figures, potentially increasing the royalty and marketing fund contribution fees owed. A prospective franchisee should be aware of this clause and ensure they understand how Beef O Bradys defines and monitors these deductions to avoid potential disputes.