What are 'Sales Discounts' and how are they treated when calculating Gross Sales for a Brueggers Bagels franchise?
Brueggers_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
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. 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 22 — CONTRACTS (FDD page 61)
What This Means (2025 FDD)
According to Brueggers Bagels's 2025 Franchise Disclosure Document, 'Sales Discounts' encompass the deductions a franchisee can take from the normal menu price of items due to BFC-approved promotions, whether local or system-wide, including coupons, and manager discounts. Additionally, discounted employee meals also fall under this category.
When calculating Gross Sales for the purpose of determining fees, a Brueggers Bagels franchisee can deduct the portion of the full menu price they do not collect due to these Sales Discounts and discounted employee meals. However, it's crucial that these Sales Discounts and discounted employee meals are fully disclosed on all reports submitted to BFC (Bruegger's Franchise Corporation).
Brueggers Bagels retains the right to disallow any Sales Discounts that do not meet their specific requirements. Furthermore, Brueggers Bagels reserves the right to modify their policies regarding revenue recognition and reporting, including what is included or excluded from Gross Sales, to align with restaurant industry practices as circumstances, business practices, and technology evolve. This means that the definition and treatment of Sales Discounts could change over time, so franchisees need to stay updated with Brueggers Bagels's policies.