How does Browns Chicken define a 'Third-Party Delivery Service'?
Browns_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
As used in this item, the term "Gross Sales" shall mean the aggregate actual gross selling prices of all foods, beverages and other products and services (including entertainment/video gaming) sold and/or performed and/or offered by or for you or the Store, in, upon or from the premises, or through or by means of the business conducted therein or otherwise by the Store or Franchise, whether for cash or for credit, provided that in determining the amount of Gross Sales, there are excluded: (a) sales, use or excise taxes passed on as such to the customer and paid to the appropriate taxing authorities; (b) the amount of all refunds, adjustments, credits and allowances made by the Store; and (c) revenues of any fees paid by you to Third-Party Delivery Services, as determined by Brown and published in Brown's Operating Manual or as promulgated in writing by Brown. A "Third-Party Delivery Service" is a company or business through which customers purchase menu items from the Store, that delivers the menu items to the customers at a location other than the Store. Third-Party Delivery Services typically charge you a fee for this service, which may be automatically deducted from the funds that are collected from the customer prior to disbursement
Source: Item 6 — OTHER FEES (FDD pages 13–15)
What This Means (2025 FDD)
According to Browns Chicken's 2025 Franchise Disclosure Document, a "Third-Party Delivery Service" is defined as a company or business through which customers purchase menu items from the store, and that delivers the menu items to the customers at a location other than the store. Browns Chicken specifies that these third-party services typically charge the franchisee a fee for their services, which may be automatically deducted from the funds collected from the customer before the service disburses the remaining funds to the franchisee.
Examples of Third-Party Delivery Services provided in the FDD include Grubhub, DoorDash, Uber Eats, ezCater, and Postmates. This definition is important for Browns Chicken franchisees because the revenues paid to these services are excluded from the calculation of Gross Sales when determining royalty and advertising fees.
Understanding this definition is crucial for Browns Chicken franchisees to accurately calculate and report their gross sales, as it directly impacts the royalty and advertising fees they owe to Browns Chicken. Franchisees should ensure they correctly track and deduct the fees paid to these Third-Party Delivery Services from their gross sales to avoid any discrepancies or potential audit issues.