When can employee discounts be credited against Gross Revenue for Buns On Fire?
Buns_On_Fire Franchise · 2025 FDDAnswer from 2025 FDD Document
- (ii.) Franchisor may, from time to time, authorize certain other items to be excluded from Gross Revenue. Any such permission may be revoked or withdrawn at any time in writing by Franchisor in its discretion. In addition to the foregoing, the following are included within the definition of "Gross Revenue" described except as noted below:
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- The full value of Products furnished to Franchisee's employees as an incident to their employment except that the value of any discounts extended to such employees may be credited against Gross Revenue during the reporting month in which the Products were furnished for the purpose of determining the amount of Gross Revenue upon which the Royalty Fee is due; and
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- All proceeds from the sale of coupons, gift certificates or vouchers; provided that at the time such coupons, gifts certificates or vouchers are redeemed the retail price thereof may be credited against Gross Revenue during the reporting month in which such coupon, gift certificate or voucher is redeemed for the purpose of determining the amount of Gross Revenue upon which the Royalty Fee is due.
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Source: Item 23 — RECEIPTS (FDD pages 49–200)
What This Means (2025 FDD)
According to the 2025 Buns On Fire Franchise Disclosure Document, employee discounts can be credited against gross revenue during a specific timeframe. The FDD states that the full value of products furnished to a franchisee's employees as part of their employment is included in the definition of "Gross Revenue." However, the value of any discounts extended to employees can be credited against Gross Revenue during the reporting month in which the products were furnished.
This means that while the initial value of products provided to employees is counted towards the franchisee's gross revenue, the discounts given to those employees can be subtracted from the gross revenue calculation for royalty fee purposes. This is applicable only in the month when the products were initially provided to the employees.
For a prospective Buns On Fire franchisee, this policy can help reduce the royalty fees owed to the franchisor, as the royalty fee is calculated based on the franchisee's Gross Revenue. By deducting the value of employee discounts in the month they are given, the franchisee can lower their reported Gross Revenue and, consequently, the amount of royalty fees due for that month. It is important for franchisees to keep accurate records of employee discounts to properly account for these credits.