Are credit card sales included in the Gross Sales Receipts for a Bevaris Alliance franchise?
Bevaris_Alliance Franchise · 2024 FDDAnswer from 2024 FDD Document
- "Gross Sales Receipts" is the total gross sales revenues accrued or collected from the operations of Franchisee's Branded Business (as defined in the Franchise Agreement), 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 (Food and Beverages) offered and sold by the 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 to 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 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 6 — OTHER FEES (FDD pages 8–10)
What This Means (2024 FDD)
According to Bevaris Alliance's 2024 Franchise Disclosure Document, gross sales receipts include revenues from credit card sales. Specifically, the FDD 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 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 definition clarifies that sales made via credit card are part of the total revenues on which fees and other financial obligations to Bevaris Alliance are calculated.
However, the 2024 FDD also specifies certain deductions from gross sales receipts. These deductions include any amounts refunded to customers, amounts received in connection with the settlement of claims for damaged or unsalable food and beverages, amounts deemed uncollectible accounts or bad debts, and the cost of employee meals provided at cost, as well as the cost of charitable, promotional, and other complimentary meals given in the ordinary course of business. These deductions provide some relief to the franchisee by reducing the base upon which royalties or other fees might be calculated.
For a prospective Bevaris Alliance franchisee, this means that all sales, including those made by credit card, contribute to the gross sales receipts used to calculate royalties and other fees payable to the franchisor. It is important to understand what constitutes gross sales and what deductions are allowed, as this directly impacts the franchisee's financial obligations. Franchisees should carefully track all sales and deductions to ensure accurate reporting and payment of fees to Bevaris Alliance.