Under the Buns On Fire Franchise Agreement, what is the definition of 'Gross Revenue'?
Buns_On_Fire Franchise · 2025 FDDAnswer from 2025 FDD Document
For the purposes of determining the royalties to be paid hereunder, "Gross Revenue" means all revenue of the Franchise Business, including all sales of products and services to customers of the Franchise Business, including income related to catering and delivery services, and any sales or orders of food products or food preparation services provided from or related to the Franchise Business, whether for cash or credit and regardless of collection in the case of credit. In the event of a cash shortage, the amount of Gross Revenue shall be determined based on the records of the electronic cash register system and any cash shortage shall not be considered in the determination. Gross Revenue shall expressly exclude the following:
(i.) Sums representing sales taxes collected directly from customers, based upon present or future
laws of federal, state or local governments, collected by Franchisee in the operation of the Franchised Business, and any other tax, excise or duty which is levied or assessed against Franchisee by any federal, state, municipal or local authority, based on sales of specific merchandise sold at or from the Franchised Business, provided that such taxes are actually transmitted to the appropriate taxing authority;
Source: Item 23 — RECEIPTS (FDD pages 49–200)
What This Means (2025 FDD)
According to the 2025 Buns On Fire Franchise Disclosure Document, Gross Revenue is defined as all revenue of the Franchise Business. This includes all sales of products and services to customers, income from catering and delivery services, and any sales or orders of food products or food preparation services related to the Franchise Business, whether paid in cash or credit, and regardless of whether payment for credit sales has been collected. For royalty calculation purposes, this is a broad definition encompassing nearly all income streams.
However, the definition of Gross Revenue for Buns On Fire expressly excludes sales taxes collected directly from customers, based upon present or future laws of federal, state or local governments. It also excludes any other tax, excise or duty which is levied or assessed against the franchisee by any federal, state, municipal or local authority, based on sales of specific merchandise sold at or from the Franchised Business, provided that such taxes are actually transmitted to the appropriate taxing authority.
In the event of a cash shortage, the Buns On Fire agreement specifies that the amount of Gross Revenue will be determined based on the records of the electronic cash register system, and the cash shortage itself will not be considered in the determination. This protects the franchisee from paying royalties on revenue they did not actually receive due to theft or error, but it also places importance on maintaining accurate records through the electronic cash register system.