Does the Bevaris Alliance franchise agreement define 'Food and Beverages'?
Bevaris_Alliance Franchise · 2024 FDDAnswer from 2024 FDD Document
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- "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, the term "Food and Beverages" is referenced within the definition of "Gross Sales Receipts" in Item 6, although a specific definition of the term is not provided. Gross Sales Receipts include revenues from all sales of food, beverages, and other items and services offered by the Branded Business. Certain deductions are allowed from Gross Sales Receipts, such as refunds to customers, amounts from damaged food and beverages claims, uncollectible accounts, and the cost of employee meals or complimentary meals.
While the FDD does not explicitly define what constitutes "food" or "beverages," it does outline what is included in Gross Sales Receipts and what can be deducted. This is important for franchisees because royalties and other fees are often calculated based on Gross Sales Receipts. Understanding what contributes to this figure is crucial for financial planning and reporting.
Prospective franchisees should seek clarification from Bevaris Alliance regarding the specific types of food and beverage products that are included or excluded from the definition of Gross Sales Receipts. This will help ensure accurate reporting and avoid potential disputes over royalty payments. It would also be prudent to understand if there are any restrictions on the types of food and beverage products that can be sold, as this could impact revenue potential.