What items are excluded from the Gross Sales calculation for Browns Chicken franchise fees?
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 total gross selling prices of all foods, beverages, other products, and services, including entertainment or video gaming, sold by the store. However, certain items are excluded from this calculation for the purpose of determining franchise fees.
Specifically, Browns Chicken excludes sales, use, or excise taxes that are passed on to the customer and paid to the appropriate taxing authorities. The company also excludes the amount of all refunds, adjustments, credits, and allowances made by the store. Additionally, 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 excluded from the Gross Sales calculation.
These exclusions can impact the amount of royalty and advertising fees a Browns Chicken franchisee pays, as these fees are calculated as a percentage of Gross Sales. By excluding these items, the franchisee pays fees on a net sales figure that more accurately reflects the revenue retained by the business. This is a fairly standard practice in franchising, as it avoids franchisees paying fees on amounts that are collected on behalf of other entities, such as taxes or delivery services.