For Bevaris Alliance, are sales on credit terms included in 'Gross Sales Receipts'?
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 revenues accrued or collected from the franchisee's branded business operations, encompassing sales of food, beverages, and other items and services, whether these sales are made for cash, check, credit card, pre-paid cards, pre-order and paid meals through designated software, or on credit terms. This definition is important because Bevaris Alliance calculates royalty fees and system marketing fund fees as a percentage of gross sales receipts.
However, the definition 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, bad debts or costs of collection, 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.
For a prospective Bevaris Alliance franchisee, this means that while sales on credit terms are initially included in the calculation of gross sales receipts, any amounts that later become uncollectible can be deducted. This could impact the amount of royalty and system marketing fund fees owed to Bevaris Alliance. It is important for franchisees to maintain accurate records of sales and any subsequent deductions to ensure accurate reporting and fee calculation.