What is excluded from the calculation of 'Gross Sales' for a Black Bear Diner franchise?
Black_Bear_Diner Franchise · 2025 FDDAnswer from 2025 FDD Document
"Gross Sales" means the total amount of all revenues Franchisee receives from the sale of all menu items, Gift Shop Products, banquet and catering services and from goods and services from all sources in any way connected with the Franchised Restaurant whether for check, cash, credit or otherwise including, without limitation, all proceeds from any business interruption insurance.
Gross Sales does not include sales tax collected from customers and paid to the appropriate taxing authorities, discounts deducted from the prices charged and the price of employees' meals actually reported and paid;
Source: Item 23 — RECEIPT (FDD pages 56–243)
What This Means (2025 FDD)
According to Black Bear Diner's 2025 Franchise Disclosure Document, 'Gross Sales' is a crucial figure, as it determines several financial obligations for the franchisee. Gross sales include all revenues from the sale of menu items, gift shop products, banquet and catering services, and all goods and services connected with the franchised restaurant, regardless of the method of payment (check, cash, credit). It also includes proceeds from any business interruption insurance.
However, the calculation of Gross Sales for a Black Bear Diner franchise specifically excludes certain items. These exclusions are sales tax collected from customers and then paid to the appropriate taxing authorities, discounts deducted from the prices charged to customers, and the price of employees' meals that are actually reported and paid.
Understanding what constitutes 'Gross Sales' and what is excluded is important for Black Bear Diner franchisees because it directly impacts the royalty fees and marketing fund contributions they must pay. Franchisees need to accurately track their sales and exclusions to ensure they are meeting their financial obligations to the franchisor. This definition ensures that franchisees are not paying fees on money that is simply being passed through for taxes or used for employee compensation.