What is included in '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 Bevaris Alliance's 2024 Franchise Disclosure Document, Gross Sales Receipts are defined as the total gross sales revenues accrued or collected from the operations of the Franchisee's Branded Business. This includes revenues from cash, check, credit card, pre-paid cards, pre-order and paid meals through designated software, or on credit terms. These revenues are derived from all sales of food, beverages, and other items and services offered and sold pursuant to the Franchisee's Branded Business. Essentially, it encompasses all income generated from the sales of the Bevaris Alliance franchise.
However, certain items are deducted from or not included in Gross Sales Receipts. These include any amounts refunded to customers, amounts received in connection with the settlement of claims for damaged or unsalable food and beverages, and amounts deemed uncollectible accounts, bad debts, or costs of collection. Additionally, the cost of meals provided to employees 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 are also excluded.
For a prospective Bevaris Alliance franchisee, understanding this definition is crucial because the royalty revenue is based on a percentage of these Gross Sales Receipts. Knowing exactly what constitutes includable and excludable revenue allows for accurate calculation of royalty payments and a clear understanding of the financial obligations to the franchisor. This also aids in financial planning and forecasting for the franchise business.