For Bevaris Alliance, are amounts refunded to customers deducted from 'Gross Sales Receipts'?
Bevaris_Alliance Franchise · 2024 FDDAnswer from 2024 FDD Document
Gross Sales Receipts: The total gross sales revenues accrued or collected from the operations of Franchisee's Branded Business, whether for cash, check, credit card, pre-paid cards, pre order and paid meals through designated software or on credit terms, from all sales of food, beverages, and other items and services (Food and Beverages) offered and sold pursuant to the Franchisee's Branded Business. The following shall be deducted from (or, as appropriate within its context, not included in) Gross Sales Receipts: (a) Any amounts, whether in cash, credit, or otherwise refunded customers; (b) All amounts received in connection with the settlement of claims for damaged or unsalable Food and Beverages; (c) All amounts which are deemed to represent uncollectible accounts, bad debts or costs of collection; (d) The cost of meals provided to the employees of Franchisee at cost, if any; and (e) the cost of charitable, promotional, and other complimentary meals given in the ordinary course of business and as is customary for similar operations.
Source: Item 23 — RECEIPT (FDD pages 22–88)
What This Means (2024 FDD)
According to Bevaris Alliance's 2024 Franchise Disclosure Document, customer refunds are deducted from gross sales receipts when calculating royalty fees. Gross Sales Receipts are defined as the total gross sales revenues accrued or collected from the operations of the Franchisee's Branded Business, whether for cash, check, credit card, pre-paid cards, pre order and paid meals through designated software or on credit terms, from all sales of food, beverages, and other items and services offered and sold pursuant to the Franchisee's Branded Business.
Specifically, any amounts refunded to customers, whether in cash, credit, or otherwise, are deducted from the gross sales receipts. This means that Bevaris Alliance franchisees only pay royalties on the net sales they actually retain, rather than on the total amount of sales before refunds.
In addition to customer refunds, other items are also deducted from gross sales receipts, including amounts received in connection with the settlement of claims for damaged or unsalable food and beverages, amounts deemed uncollectible accounts, bad debts or costs of collection, the cost of meals provided to employees at cost (if any), and the cost of charitable, promotional, and other complimentary meals given in the ordinary course of business and as is customary for similar operations. This comprehensive list of deductions provides a clearer picture of the sales revenue subject to royalty fees for Bevaris Alliance franchisees.