Are proceeds from business interruption insurance policies included in the Gross Sales calculation for a Beggars Pizza restaurant?
Beggars_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
ng offered.
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.
Note 3. Our affiliate, Beg Adv, Inc., maintains a dedicated marketing fund for the benefit of the System (the "Brand Fund"). Your required contribution to the Brand Fund is in addition to the amount you must spend on local advertising for the Restaurant. During your first three months of
operation, you must spend at least $3,000 per month on local advertising (with the first month prorated if necessary), and for each subsequent month you must spend at least 2% of your monthly Gross Sales. See Item 11 of this disclosure document for more information about the Brand Fund and your local marketing
Source: Item 6 — OTHER FEES (FDD pages 9–11)
What This Means (2025 FDD)
According to Beggars Pizza's 2025 Franchise Disclosure Document, proceeds from business interruption insurance policies are included in the calculation of Gross Sales. Gross Sales are defined as 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.
This definition is important because several fees and obligations for a Beggars Pizza franchisee are based on a percentage of Gross Sales. For example, the franchisee must spend at least 2% of monthly Gross Sales on local advertising after the first three months of operation. Therefore, including business interruption insurance proceeds in Gross Sales will increase the amount the franchisee is required to spend on local advertising.
However, the FDD also specifies items that are excluded from Gross Sales. These exclusions include refunds 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. Understanding what constitutes Gross Sales and what is excluded is crucial for accurately calculating fees and advertising expenses for a Beggars Pizza franchise.