What deductions are allowed when calculating Gross Sales for a Brueggers Bagels franchise?
Brueggers_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
"Gross Sales" is defined as all sales generated through the Bakery including fees for any products or goods you sell, whether for cash or credit (regardless of collectability, except as provided below), and income of every kind or nature related to the Bakery, including, without limitation, revenues from the sale of branded merchandise and food products, whether from sales on the Premises, by delivery, from catering if the Bakery provides the product, by on-line, internet or phone-app ordering if picked up at the Bakery or at wholesale (whether the sales method is permitted or not) and from the use of vending machines or similar arcade-like machines. In the event your business operations are interrupted and you receive business interruption insurance proceeds, then the amount of Gross Sales used by you to determine your loss will be deemed the Gross Sales for that period and deemed made when you receive the insurance proceeds. But "Gross Sales" does not include any sales tax or other taxes you collect from customers for transmittal to the appropriate taxing authority. Gross Sales includes the retail value of all products sold in connection with the redemption of coupons, gift certificates, gift cards or vouchers; however, at the time such coupons, gift certificates, gift cards or vouchers are purchased, the retail price may be excluded from Gross Sales for the purpose of determining the amount of Gross Sales upon which fees are due. When calculating Gross Sales, you may deduct that portion of the normal full menu price of any item that you do not collect as a result of BFC approved promotions (whether local or system-wide, including coupons) and manager discounts (collectively, "Sales Discounts"), as well as discounted employee meals. Sales Discounts and discounted employee meals must be fully disclosed on all reports you submit to BFC, and BFC reserves the right, in its sole discretion, to disallow any Sales Discounts not meeting the requirements we set forth. We reserve the right to modify our policies consistent with restaurant industry practices regarding revenue recognition, revenue reporting, and the inclusion in or exclusion of certain revenue from "Gross Sales" as circumstances, business practices, and technology change.
Source: Item 6 — OTHER FEES (FDD pages 13–18)
What This Means (2025 FDD)
According to Brueggers Bagels' 2025 Franchise Disclosure Document, Gross Sales include all sales generated through the bakery, encompassing fees for products sold, whether in cash or credit, and all income related to the bakery. This includes revenues from branded merchandise, food products sold on the premises, through delivery, catering (if the bakery provides the product), online, internet, or phone-app ordering (if picked up at the bakery), wholesale, and vending machines. Business interruption insurance proceeds are also included, deemed as Gross Sales for the period when the proceeds are received. However, sales tax or other taxes collected for transmittal to taxing authorities are excluded from Gross Sales. The retail value of products sold via coupons, gift certificates, gift cards, or vouchers is included, although the retail price may be excluded when these items are initially purchased.
When calculating Gross Sales, a Brueggers Bagels franchisee can deduct the portion of the normal full menu price not collected due to BFC-approved promotions, including local or system-wide coupons, manager discounts (collectively termed "Sales Discounts"), and discounted employee meals. These deductions are allowed to reduce the amount of Gross Sales upon which fees are due.
It is important to note that all Sales Discounts and discounted employee meals must be fully disclosed on reports submitted to BFC. BFC retains the right to disallow any Sales Discounts that do not meet their requirements. Brueggers Bagels also reserves the right to modify its policies regarding revenue recognition and reporting, including the inclusion or exclusion of certain revenue from Gross Sales, consistent with restaurant industry practices as circumstances, business practices, and technology evolve.