Are uncollectible accounts deducted from Gross Sales Receipts for a Bevaris Alliance franchise?

According to Bevaris Alliance's 2024 Franchise Disclosure Document, uncollectible accounts are deducted from Gross Sales Receipts. Gross Sales Receipts are defined 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.

Specifically, the following items are deducted from Gross Sales Receipts: amounts refunded to customers, amounts received from claims for damaged or unsalable food and beverages, amounts deemed uncollectible accounts, bad debts or costs of collection, and 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.

This definition of Gross Sales Receipts is important because many of the franchisee's obligations to Bevaris Alliance, such as royalty payments, are calculated as a percentage of Gross Sales Receipts. By allowing deductions for items like customer refunds and uncollectible accounts, Bevaris Alliance reduces the franchisee's royalty obligations, aligning the franchisee's payments with actual, realized revenue.