Are the costs of complimentary meals deducted from Gross Sales Receipts for a Bevaris Alliance franchise?

According to Bevaris Alliance's 2024 Franchise Disclosure Document, the cost of charitable, promotional, and other complimentary meals given in the ordinary course of business and as is customary for similar operations can be deducted from Gross Sales Receipts. 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 a designated software or on credit terms, from all sales of food, beverages, and other items and services offered and sold by the Branded Business.

This means that Bevaris Alliance franchisees are not required to pay royalties on the value of complimentary meals they provide to customers as part of their normal business operations. This is a benefit to the franchisee, as it reduces the amount of revenue subject to royalty fees.

In addition to complimentary meals, other items that can be deducted from Gross Sales Receipts include refunds to customers, amounts received in connection with the settlement of claims for damaged or unsalable Food and Beverages, and amounts deemed to represent uncollectible accounts, bad debts or costs of collection. The cost of meals provided to employees of Franchisee at cost, if any, can also be deducted.