What is included in the definition of 'Gross Sales' for a Beggars Pizza franchise?
Beggars_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
- 4.3 Gross Sales; Accounting Period. "Gross Sales" means all revenues generated from sales of all products and services conducted at, from, or with respect to the Restaurant whether such sales are evidenced by cash, check, credit, charge, account, gift cards, loyalty cards, barter, or exchange, and any proceeds from business interruption insurance coverage.
Gross Sales will not include the sale of products or services for which refunds have been made in good faith to customers, the sale of equipment or furnishings used in the operation of the Restaurant, revenue derived from the sale or issuance of System gift or loyalty cards (although revenue derived from the sale of products and services paid for with gift or loyalty cards is included), any reduction in revenue due to discounts or coupon sales, any sales taxes or other taxes collected from customers by Franchisee and paid directly to the appropriate taxing authority. "Accounting Period" means every seven (7) days beginning on Monday and ending on Sunday.
Source: Item 22 — CONTRACTS (FDD page 39)
What This Means (2025 FDD)
According to Beggars Pizza's 2025 Franchise Disclosure Document, "Gross Sales" encompasses all revenues generated from the sales of products and services at the restaurant. This includes sales evidenced by various payment methods such as cash, checks, credit, charge, account payments, gift cards, loyalty cards, barter, or exchange. It also includes any proceeds from business interruption insurance coverage.
However, the definition of "Gross Sales" for Beggars Pizza excludes certain items. These exclusions include revenues from the sale of products or services for which refunds have been made in good faith to customers, the sale of equipment or furnishings used in the restaurant's operation, and revenue derived from the sale or issuance of System gift or loyalty cards. It also excludes any reduction in revenue due to discounts or coupon sales, and any sales taxes or other taxes collected from customers by the franchisee and paid directly to the appropriate taxing authority.
For a prospective Beggars Pizza franchisee, understanding this definition is crucial because the royalty fees are calculated as a percentage of Gross Sales. Specifically, the franchisee must pay the greater of 5% of Gross Sales or $500 for each accounting period (every seven days). If applicable law prohibits the franchisee from paying a percentage of revenue from the sale of alcoholic beverages, the franchisee must pay the greater of 6.5% of Gross Sales (excluding revenues from the sale of alcoholic beverages) or $500 for each Accounting Period.