How does Browns Chicken define 'Gross Sales' for the purpose of reporting accuracy?
Browns_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
- (a) The term "Gross Sales" as used herein shall mean the total amount of dollars of the actual sales price, whether for cash or on credit or partly for cash and partly on credit, of all sales of food and beverages conducted in or from the Premises, including all mail or telephone orders received or filled at or from the Premises. Gross Sales shall not, however, include any sums collected and paid out for any sales or excise tax imposed by any duly-constituted governmental authority, nor the amount of any cash or credit refund made upon any sale where the merchandise sold, or some part thereof, is thereafter returned by the purchaser and accepted by Sublessee, nor sales of fixtures which are not a part of Sublessee's stock in trade.
- (b) Sublessee shall keep in the Premises or in some other location of which Sublessor shall have been notified in writing, a permanent, accurate set of books and records of all sales and all revenue derived from business conducted in the Premises during each day of the Term, and supporting records, including excise tax reports, state sales tax and business and occupation tax reports. Such records will be kept, retained, and preserved for at least three (3) years after the expiration of each lease year. All such records, including sales, business and occupation tax reports, shall be open to inspection and audit by Sublessor and/or its agents at all reasonable times during ordinary business hours.
- (c) On or before the thirtieth (30th) day following the expiration of each full lease year commencing with the end of the first (1st) lease year and on or before the thirtieth (30th) day following the expiration of any fractional year at the end of the Term, Sublessee shall deliver to Sublessor at the place where Base Rent is then payable, a complete
statement signed by Sublessee or on its behalf by its duly authorized officer or representative, showing in reasonable detail the amount of Gross Sales made from the Premises during said period, accompanied by a sworn affidavit from Sublessee or said officer, or representative, verifying the accuracy of said statement.
Source: Item 22 — Contracts (FDD page 43)
What This Means (2025 FDD)
According to Browns Chicken's 2025 Franchise Disclosure Document, 'Gross Sales' is defined as the total dollar amount of the actual sales price for all food and beverage sales conducted in or from the premises, whether the sales are for cash, credit, or a combination of both, including mail or telephone orders received or filled at the premises.
However, Gross Sales does not include sums collected and paid out for sales or excise taxes imposed by a governmental authority. It also excludes cash or credit refunds made when merchandise is returned by a purchaser and accepted by the franchisee, as well as sales of fixtures that are not part of the franchisee's stock in trade.
Browns Chicken requires franchisees to maintain accurate books and records of all sales and revenue derived from the business, including supporting documents like excise tax reports and sales tax reports. These records must be kept for at least three years after the end of each lease year and are subject to inspection and audit by Browns Chicken and its agents at reasonable times during business hours. Franchisees must also provide Browns Chicken with regular reports of Gross Sales, including weekly reports, monthly reports, and annual financial statements prepared by an independent certified public accountant.