What is excluded from the definition of 'Gross Revenue' for a Bhc franchise regarding taxes?
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 franchised restaurant is defined as the gross amount of revenue earned or received from any source related to the operation of the restaurant, whether in cash, via gift card redemption, or credit, and regardless of collection status. This includes revenue from delivery services. Gross Revenue also includes any amount received from business insurance proceeds.
However, the definition of Gross Revenue for a Bhc franchise specifically excludes certain items. The amount of any tax imposed by a governmental authority directly on sales and collected from customers is excluded, provided that the amount of the tax is shown separately and is in fact paid to the appropriate governmental authority.
In addition to taxes collected and remitted, Gross Revenue also excludes bona fide customer refunds and tips or gratuities paid or payable to employees. This definition is important because many of the franchisee's financial obligations to Bhc, such as the Marketing and Promotion Fee, are calculated as a percentage of Gross Revenue.