What is included in the definition of 'Gross Revenues' for a Big Apple Bagels franchise?
Big_Apple_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
c. Definition of "Gross Revenues." As used in this Agreement, the term "Gross Revenues" shall mean the entire amount of all gross sales and business receipts, including direct or indirect barter transactions, catering accounts, proceeds of business interruption insurance policies, wholesale accounts (both on and off premises) from the operation of the Store, through or by means of the business conducted in connection therewith, whether for cash or credit. It does not include: (1) sales, use, or service taxes collected from customers and paid to the appropriate taxing authority; and (2) any bona fide customer refunds and approved rebates, discounts and allowances. Franchisee agrees that Franchisee's POS (Point-of-Sale) System may be polled by Franchisor. Franchisee must make payments by electronic bank draft. Gross Revenues are based on retail prices (unless the purchaser has an arrangement for wholesale purchases, in which event Gross Revenues are based on wholesale prices), subject only to the exclusions noted in (1) and (2) of this paragraph. The inclusion in or exclusion from Gross Revenues of any fees paid by Franchisees to Third Party Delivery Services will be determined by BAB and published in BAB's Operations Manual or as promulgated in a Policy Statement issued by BAB. A "Third Party Delivery Service" is a company or business through which customers purchase menu items from Franchisee's Store, that delivers said menu items to the customer at a location other than Franchisee's Store. Third Party Delivery Services typically charge the Franchisee a fee for this
service, which may be automatically deducted from the funds that are collected from the customer prior to disbursement of the funds by the Third Party Delivery Service to the Franchisee. Examples of Third Party Delivery Services include, but are not limited to GrubHub, DoorDash, UberEats, ezCater.
Source: Item 22 — CONTRACTS (FDD pages 86–87)
What This Means (2025 FDD)
According to Big Apple Bagels' 2025 Franchise Disclosure Document, "Gross Revenues" is defined as the entire amount of all gross sales and business receipts. This includes direct or indirect barter transactions, catering accounts, proceeds from business interruption insurance policies, and wholesale accounts (both on and off premises) derived from the operation of the Big Apple Bagels store. These revenues are calculated whether the transactions are for cash or credit. Gross Revenues are based on retail prices unless there is an arrangement for wholesale purchases, in which case they are based on wholesale prices.
However, the definition of "Gross Revenues" for a Big Apple Bagels franchise specifically excludes certain items. These exclusions include sales, use, or service taxes collected from customers and then paid to the appropriate taxing authority. Additionally, any bona fide customer refunds, approved rebates, discounts, and allowances are also excluded from the calculation of Gross Revenues.
The inclusion or exclusion of fees paid to Third Party Delivery Services, such as GrubHub, DoorDash, UberEats, and ezCater, is determined by Big Apple Bagels and published in their Operations Manual or in a Policy Statement. These services typically charge a fee to the franchisee, which may be deducted from the customer's payment before the funds are disbursed to the franchisee. Big Apple Bagels franchisees should refer to the Operations Manual or Policy Statements to understand how these fees impact their Gross Revenues calculation.