What is included in the definition of 'Gross Sales' for a Beggars Pizza restaurant?
Beggars_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
Note 2. "Gross Sales" means all revenues generated from sales of all products and services conducted at, from, or with respect to the Restaurant, whether these sales are evidenced by cash, check, credit, charge, account, gift cards, loyalty cards, barter, or exchange, and the proceeds from any business interruption insurance policies. Gross Sales do 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 from the sale or issuance of System gift or loyalty cards (although revenue 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, or any sales taxes or other taxes collected from customers and paid directly to the appropriate taxing authority.
Source: Item 6 — OTHER FEES (FDD pages 9–11)
What This Means (2025 FDD)
According to Beggars Pizza's 2025 Franchise Disclosure Document, "Gross Sales" encompasses all revenue 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 accounts, gift cards, loyalty cards, barter, or exchange. It also includes proceeds from any business interruption insurance policies. This broad definition is important because several fees and obligations, such as the local advertising spend, are calculated as a percentage of Gross Sales.
However, the definition of Gross Sales for a Beggars Pizza restaurant also specifically excludes certain items. These exclusions include refunds made in good faith to customers, sales of equipment or furnishings used in the restaurant's operation, and revenue from the initial sale or issuance of System gift or loyalty cards. It is important to note that while the initial sale of gift cards is excluded, revenue from products and services purchased using those gift cards is included in Gross Sales. Additionally, any reduction in revenue due to discounts or coupon sales, as well as sales taxes or other taxes collected from customers and remitted to the appropriate taxing authority, are also excluded from Gross Sales.
Understanding what constitutes Gross Sales is crucial for Beggars Pizza franchisees because it directly impacts their financial obligations to the franchisor, particularly regarding advertising spend. For example, the FDD states that after the first three months of operation, franchisees must spend at least 2% of their monthly Gross Sales on local advertising. Therefore, accurately tracking and reporting Gross Sales, while accounting for the included and excluded items, is essential for compliance and financial planning.