Can the value of 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 Any such permission may be revoked or withdrawn at any time in writing by Franchisor in its discretion.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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Source: Item 23 — RECEIPTS (FDD pages 49–200)
What This Means (2025 FDD)
According to the 2025 Buns On Fire Franchise Disclosure Document, the value of discounts extended to employees can be credited against Gross Revenue. Specifically, the FDD states that the full value of products furnished to employees as an incident to their employment is included within the definition of "Gross Revenue". However, the value of any discounts extended to employees may be credited against Gross Revenue during the reporting month in which the products were furnished. This credit is applicable when determining the amount of Gross Revenue upon which the Royalty Fee is due.
This provision benefits franchisees by reducing the royalty fees owed to Buns On Fire. By allowing franchisees to deduct the value of employee discounts from their gross revenue, the franchisor effectively lowers the base amount upon which the royalty fee is calculated. This can lead to significant savings for the franchisee, especially in businesses where employee discounts are a common practice.
For a prospective Buns On Fire franchisee, it's important to understand the specific details and limitations of this credit. Franchisees should maintain accurate records of all employee discounts provided and ensure that these discounts are properly documented in their monthly reports. Additionally, franchisees should be aware that Buns On Fire retains the right to revoke or withdraw this permission at any time in writing, so it's crucial to stay informed of any changes to the franchise agreement.