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For Big Apple Bagels, what is included in 'Gross Revenues' besides cash sales?

Q: For Big Apple Bagels, what is included in 'Gross Revenues' besides cash sales?

- 1. "Gross Revenues" is defined in the Franchise Agreement as 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) arising out of the operation of the Store, or through or by means of the business conducted in connection therewith, whether for cash or credit, but excluding: (1) sales, use, or service taxes collected from customers and paid to the appropriate taxing authority; and (2) all bona fide customer refunds and approved rebates, discounts and allowances. Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 76–80)

Big_Apple_Bagels Franchise · 2025 FDD

Answer from 2025 FDD Document

1. "Gross Revenues" is defined in the Franchise Agreement as 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) arising out of the operation of the Store, or through or by means of the business conducted in connection therewith, whether for cash or credit, but excluding: (1) sales, use, or service taxes collected from customers and paid to the appropriate taxing authority; and (2) all bona fide customer refunds and approved rebates, discounts and allowances.

Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 76–80)

What This Means (2025 FDD)

According to Big Apple Bagels's 2025 Franchise Disclosure Document, gross revenues encompass more than just cash sales. The definition includes the entire amount of all gross sales and business receipts. This incorporates direct or indirect barter transactions, catering accounts, proceeds from business interruption insurance policies, and wholesale accounts, whether these sales occur on or off the premises. These revenues are included regardless of whether the payment is made in cash or credit.

However, there are specific exclusions from the gross revenue calculation for Big Apple Bagels franchises. Sales, use, or service taxes collected from customers and then paid to the appropriate taxing authority are excluded from gross revenues. Additionally, all bona fide customer refunds, approved rebates, discounts, and allowances are also subtracted from the gross revenue figure.

For a prospective Big Apple Bagels franchisee, understanding this definition is crucial because royalties and other fees owed to the franchisor are typically calculated as a percentage of gross revenues. Therefore, a clear understanding of what constitutes gross revenue directly impacts the franchisee's financial obligations and reported financial performance.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.

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