What constitutes 'Gross Revenue' for a Bhc restaurant, including examples of revenue sources?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
in individual cases in our discretion.
- (2) "Gross Revenue" means the gross amount of revenue, whether for cash, by redemption of gift cards or certificates or for credit, regardless of collection, earned or received by you from any source in connection with the operation of the BHC Restaurant or with any similar or related activity, whether on or off your business premises, arising directly or indirectly from whatever source, including but not limited to sales from delivery or deliver services such as Door Dash, Uber Eats, Postmates, etc. Gross Revenue also includes any amount received from business insurance proceeds. "Gross Revenue" does not include: (i) the amount of any tax imposed by any governmental authority directly on sales and collected from customers, provided that the amount of any such tax is shown separately and is in fact paid by you to the appropriate governmental authority; (ii) the amount of any bona fide customer refunds; and (iii) tips or
Source: Item 6 — Other Fees (FDD pages 12–18)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, "Gross Revenue" is comprehensively defined for the purpose of calculating royalty fees and other payments. It encompasses the total revenue earned or received by a franchisee from any source related to the operation of the Bhc restaurant. This includes all revenue, whether received in cash, through the redemption of gift cards or certificates, or via credit transactions, irrespective of whether the amounts have actually been collected.
Gross revenue includes sales from delivery services like DoorDash, Uber Eats, and Postmates, as well as any proceeds received from business insurance. However, the definition explicitly excludes certain items. These exclusions are (i) taxes imposed directly on sales and collected from customers, provided these taxes are shown separately and remitted to the appropriate governmental authority, (ii) bona fide customer refunds, and (iii) tips or gratuities paid to employees.
Bhc franchisees should pay close attention to this definition, as it forms the basis for calculating royalty fees, which are 4.5% of Gross Revenue from both Affiliate Franchised and Subfranchised BHC Restaurants. The accurate calculation and reporting of Gross Revenue are critical for compliance with the franchise agreement and to avoid potential underpayment penalties, which can include interest and audit costs. Bhc also has the right to audit the franchisee's books and records to ensure accurate reporting.