Does Carbones Pizzeria aggregate gross sales across all of a franchisee's locations when calculating royalties?
Carbones_Pizzeria Franchise · 2025 FDDAnswer from 2025 FDD Document
wenty-five Thousand Dollars ($25,000.00) (the "Franchise Fee"), payable in full upon the execution of this Agreement. It is expressly understood and agreed by the parties that the Franchise Fee is and shall be fully earned by Franchisor upon the signing of this Agreement and no part of the Franchise Fee shall be refunded to Franchisee for any reason whatsoever.
- b. In addition to the Franchise Fee, Franchisee shall pay to the Franchisor during the term of this Agreement, a "Royalty" as follows: (a) 4% of total Gross Sales on the initial $1,000,000 in Gross Sales per calendar year, at which point the Royalty is reduced to (b) 3% of Gross Sales on the next $1,000,000 per calendar year, at which point the Royalty is reduced to (c) 2% of Gross Sales over $2,000,000 in such calendar year.
- c. The Royalty shall be payable monthly on the 10th day following
Source: Item 23 — RECEIPTS (FDD pages 30–116)
What This Means (2025 FDD)
According to Carbones Pizzeria's 2025 Franchise Disclosure Document, the franchisor aggregates gross sales across all of a franchisee's Carbone's Pizzeria restaurants when calculating royalties. This means that if a franchisee owns multiple Carbones Pizzeria locations, the total gross sales from all locations are combined to determine the royalty payment.
The royalty structure involves tiered percentages based on total gross sales per calendar year. The franchisee pays 4% of total gross sales on the initial $1,000,000, then 3% on the next $1,000,000, and finally 2% on gross sales exceeding $2,000,000. This aggregation benefits the franchisee as higher sales volume leads to a lower overall royalty percentage.
However, the FDD also specifies that sales of alcohol at a 'fully licensed liquor establishment' are excluded from the gross sales calculation. This exclusion could impact the total gross sales figure used for royalty calculation, especially for locations with significant alcohol sales. Franchisees should carefully track and report their gross sales, separating alcohol sales where applicable, to ensure accurate royalty payments.