For Browns Chicken, what is included in the definition of 'Gross Sales' for fee calculation?
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, the term 'Gross Sales' is defined as the aggregate actual gross selling prices of all foods, beverages, other products, and services, including entertainment/video gaming, sold, performed, or offered by the franchisee or the store. This includes sales made in, upon, or from the premises, or through the business, whether for cash or credit.
However, the calculation of Gross Sales for royalty and advertising fee purposes excludes specific items. These exclusions include sales, use, or excise taxes that are passed on to the customer and paid to the appropriate taxing authorities. Additionally, the amount of all refunds, adjustments, credits, and allowances made by the store are excluded from Gross Sales. Furthermore, revenues of any fees paid by the franchisee to Third-Party Delivery Services, as determined by Browns Chicken and published in their Operating Manual or in writing, are also excluded.
It is important to note that Browns Chicken defines a 'Third-Party Delivery Service' 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. These services, such as Grubhub, DoorDash, Uber Eats, ezCater, and Postmates, typically charge the franchisee a fee for their services, which may be automatically deducted from the funds collected from the customer before disbursement to the franchisee. Understanding this definition is crucial for accurately calculating Gross Sales and, consequently, the royalty and advertising fees owed to Browns Chicken.