Does the definition of 'Gross Sales' for a Carbones Pizzeria franchise include amounts received for food?
Carbones_Pizzeria Franchise · 2025 FDDAnswer from 2025 FDD Document
The term "Gross Sales" shall mean the total amount of revenues, income, receipts and other amounts received from all business activities taking place by or through the Restaurant, and all other services and products, if any, sold under the Names and Marks, or otherwise, including amounts received for catering or for food and beverages
sold from a food truck or other vehicle. There shall be excluded from "Gross Sales" amounts collected and remitted by Franchisee to any governmental taxing authority in satisfaction of sales or occupation taxes, non-food vending machine sales discounts and amounts received from alcohol sales.
Source: Item 23 — RECEIPTS (FDD pages 30–116)
What This Means (2025 FDD)
According to Carbones Pizzeria's 2025 Franchise Disclosure Document, the definition of 'Gross Sales' does include amounts received for food. Specifically, Gross Sales encompasses the total revenue from all business activities at the restaurant, including sales of food and beverages. This means that the royalty fees a franchisee pays to Carbones Pizzeria are based on these revenues.
However, there are some exclusions from the Gross Sales calculation. Amounts collected for sales or occupation taxes that are remitted to governmental taxing authorities are excluded. Additionally, non-food vending machine sales discounts and amounts received from alcohol sales at a fully licensed liquor establishment are also excluded from Gross Sales.
For a prospective Carbones Pizzeria franchisee, understanding what constitutes Gross Sales is crucial because it directly impacts the royalty fees owed to the franchisor. It is important to note that while food and beverage sales are included, certain items like alcohol sales under specific conditions are not. Franchisees should carefully track their sales and ensure accurate reporting to avoid any discrepancies in royalty payments.