What is the condition for excluding amounts from 'Gross Sales Receipts' for a Bevaris Alliance franchise?
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 the 2024 FDD, Bevaris Alliance defines 'Gross Sales Receipts' 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.
There are specific conditions under which certain amounts can be deducted from or are not included in Gross Sales Receipts. These include: any amounts refunded to customers, whether in cash, credit, or otherwise; all amounts received in connection with the settlement of claims for damaged or unsalable Food and Beverages; all amounts which are deemed to represent uncollectible accounts, bad debts or costs of collection; the cost of meals provided to the employees of Franchisee 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.
For a prospective Bevaris Alliance franchisee, understanding these exclusions is crucial for accurately calculating royalty fees and system marketing fund fees, which are based on Gross Sales Receipts. Franchisees must maintain accurate records of these deductions to ensure compliance with the franchise agreement and to avoid potential disputes with Bevaris Alliance. This definition provides clarity on what revenue is subject to royalty and marketing fees, and what can be legitimately excluded, which is a common practice in franchising to ensure fair calculation of fees.