What is excluded from the calculation of 'Gross Sales' for a Buona franchise?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
For purposes of this Agreement, the term "Gross Sales" means all sales, revenues and receipts generated by the Franchised Business, including fees for any and all services Franchisee performs, whether for cash or credit (regardless of collectability) and revenues of every kind related to the Franchised Business, including but not limited to revenues from the sale of food, beverages, merchandise, proprietary products or clothing, delivery and catering not included in the price of menu items, and other services made and rendered in, on, or from the premises of the Franchised Business, or through any other means, including sales outside of the premises, that are in any way related to the Franchised Business, whether for cash, exchange or credit (and regardless of collection in the case of credit), and proceeds of business interruption insurance policies, except that Gross Sales will not include sales, use or services taxes collected from customers and actually paid to the appropriate taxing authority.
Source: Item 22 — CONTRACTS (FDD page 78)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, the term "Gross Sales" encompasses all revenues generated by the franchised business. This includes sales, revenues, and receipts from various sources, such as food, beverages, merchandise, proprietary products, clothing, delivery, catering, and other services, whether paid in cash or credit. Gross Sales also includes revenues from sales both on and off the premises, as well as proceeds from business interruption insurance policies.
However, the calculation of Gross Sales for a Buona franchise specifically excludes sales, use, or service taxes collected from customers that are then actually paid to the appropriate taxing authority. This means that franchisees do not have to pay royalty or marketing fees on the tax amounts they collect and remit to the government.
Understanding what constitutes Gross Sales is crucial for Buona franchisees because it directly impacts the calculation of royalty fees and marketing fund contributions. Franchisees should ensure they accurately track and report their sales, while also properly accounting for and excluding any sales, use, or service taxes collected from customers and remitted to the appropriate authorities.