For Better Blend, are proceeds from business interruption insurance included in Adjusted Gross Sales?

According to Better Blend's 2024 Franchise Disclosure Document, proceeds from business interruption insurance are included when calculating Adjusted Gross Sales. Adjusted Gross Sales is defined as the total dollar amount of all sales generated through the Business for a given period, including payment for any services or products sold, whether for cash or credit, and any proceeds of business interruption insurance.

However, Adjusted Gross Sales does not include coupons, discounts, and bona fide refunds to customers, sales taxes collected by the franchisee, or sales of prepaid cards or similar products. It is important to note that while the sale of prepaid cards is excluded, the redemption of any such card or product will be included in Adjusted Gross Sales. Service gratuities directed by customers to employees are also not counted towards Adjusted Gross Sales.

This definition is important because Better Blend franchisees typically pay ongoing fees (royalty fees) to the franchisor based on a percentage of Adjusted Gross Sales. Therefore, including business interruption insurance proceeds in Adjusted Gross Sales could increase the amount of royalty fees owed to Better Blend during periods when the business is not fully operational due to unforeseen circumstances. Franchisees should be aware of this when projecting their potential earnings and royalty obligations.