How does Carbones Pizzeria define 'Gross Sales' in relation to the Franchise Agreement?

According to Carbones Pizzeria's 2025 Franchise Disclosure Document, gross sales volume includes all revenues from the operation of the restaurant for 2024, including any delivery or off-premises sales. However, gross sales exclude revenue from alcohol sales, sales tax or use tax, non-food vending machine sales, and discounts. This definition is consistent with the definition of Gross Sales in the Carbones Pizzeria Franchise Agreement.

For a prospective Carbones Pizzeria franchisee, understanding this definition is crucial because royalties and other fees owed to the franchisor are typically calculated as a percentage of gross sales. Knowing exactly what is included and excluded from gross sales allows franchisees to accurately calculate their financial obligations and assess the profitability of their restaurant. For example, while Carbones Pizzeria restaurants may serve alcohol, the revenue from those sales is not included when calculating gross sales for royalty purposes.

It is important to note that sales volumes can vary considerably due to factors such as the demographics of the restaurant's trade area, competition, traffic flow, economic conditions, advertising, and the franchisee's business abilities. The FDD also states that the sales information is taken from reports provided by franchisees or from information obtained via the franchisees' point of sale systems. Carbones Pizzeria will provide written substantiation for the information appearing in this financial performance representation upon reasonable request. Finally, the FDD explicitly states that some Carbones Pizzeria Restaurants have sold these amounts, but individual results may differ, and there is no assurance that a franchisee will sell as much.