What is excluded from the calculation of 'Gross Revenue' for a Bhc restaurant?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
"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 Franchised 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 gratuities paid or payable to your employees.
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, 'Gross Revenue' for a Bhc restaurant is comprehensively defined but excludes specific items. Gross revenue generally includes all revenue earned or received from any source related to the restaurant's operation, whether in cash, via gift card redemption, or on credit, and includes sales from delivery services and business insurance proceeds. This broad definition ensures that all income streams are considered when calculating royalties and other fees.
However, the calculation of Gross Revenue for a Bhc restaurant specifically excludes three items. These exclusions are: (i) the amount of any tax imposed by a governmental authority directly on sales and collected from customers, provided the tax is shown separately and paid to the appropriate authority; (ii) the amount of any bona fide customer refunds; and (iii) tips or gratuities paid or payable to employees. These exclusions provide some financial relief to the franchisee by not including pass-through taxes, refunds, and employee tips in the revenue base used to calculate fees.
For a prospective Bhc franchisee, understanding this definition is crucial because it directly impacts the amount of royalties and marketing fees owed to Bhc. By excluding these items, Bhc aims to provide a fairer calculation of revenue that reflects the actual income retained by the franchisee. Franchisees should ensure accurate record-keeping to properly document these exclusions and reconcile their reported Gross Revenue with their financial statements.