Are proceeds from the sale of vouchers included in the 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 Any such permission may be revoked or withdrawn at any time in writing by Franchisor in its discretion.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
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Source: Item 23 — RECEIPTS (FDD pages 49–200)
What This Means (2025 FDD)
According to Buns On Fire's 2025 Franchise Disclosure Document, the proceeds from the sale of vouchers are included in the definition of "Gross Revenue." Specifically, the full proceeds from the sale of coupons, gift certificates, or vouchers are included in Gross Revenue. However, when these coupons, gift certificates, or vouchers are redeemed by customers, the retail price can be credited against Gross Revenue during the month they are redeemed.
For a prospective Buns On Fire franchisee, this means that the initial sale of vouchers will increase their reported Gross Revenue, which is used to calculate royalty and advertising fees. However, this increase is offset when the vouchers are used, as the retail price is then deducted from the Gross Revenue for that month. This approach ensures that franchisees are not paying royalties on money that has not ultimately been collected as revenue from goods or services.
This practice is fairly common in the franchise industry, as it accurately reflects the actual revenue earned by the franchisee. It is important for franchisees to keep accurate records of voucher sales and redemptions to ensure proper calculation of Gross Revenue and associated fees. Buns On Fire franchisees should pay close attention to their monthly reporting to ensure that these credits are correctly applied.