For Bevaris Alliance, what is the definition of 'Gross Sales Receipts' in terms of payment methods?
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, Gross Sales Receipts include the total gross sales revenues accrued or collected from the operations of the Franchisee's Branded Business. This encompasses all sales of food, beverages, and other items and services, regardless of the method of payment. Payment methods include cash, check, credit card, pre-paid cards, pre-order and paid meals through designated software, or sales made on credit terms. This broad definition ensures that all revenue streams are accounted for when calculating royalties and other fees.
However, certain deductions are allowed from the Gross Sales Receipts. These include amounts refunded to customers, amounts received in connection with the settlement of claims for damaged or unsalable food and beverages, and amounts deemed uncollectible, such as bad debts or costs of collection. Additionally, the cost of meals provided to employees at cost and the cost of charitable, promotional, and other complimentary meals given in the ordinary course of business and as is customary for similar operations are also deductible.
For a prospective Bevaris Alliance franchisee, understanding this definition is crucial because it directly impacts the calculation of royalty fees (10% of Gross Sales Receipts) and System Marketing Fund Fees (2% of Gross Sales Receipts). Accurate tracking and reporting of all sales, as well as proper documentation of deductions, are essential for compliance with the franchise agreement and to ensure accurate payment of fees to Bevaris Alliance. Franchisees should pay close attention to the specific inclusions and exclusions to avoid over- or under-reporting their Gross Sales Receipts.