What is included in the definition of 'Net Sales' for a Carvel franchise?
Carvel Franchise · 2025 FDDAnswer from 2025 FDD Document
"Net Sales" means all revenues generated by your Shoppe or conducted from or with respect to the Shoppe, whether the sales are evidenced by cash, check, credit, charge, account, barter or exchange.
Net Sales includes monies, gift card redemptions, or credit generated by or received from (i) the sale of Approved Products or tangible property of every kind and nature, promotional or otherwise, anywhere and (ii) services performed from, at, or in connection with the Shoppe, including (x) off-premises services (such as catering and delivery), (y) on-premises services (such as games, gambling machines, or third-party advertising within the Shoppe), or (z) any other services or activities that use either the System, the Marks, or products that are the same as or similar to the Approved Products.
Unless we specify otherwise in writing, Net Sales shall include all ancillary charges or fees, including delivery fees and other service charges, that are paid to you by a customer or by a third-party delivery or catering service (e.g., Uber Eats, Postmates, Grubhub, ezCater, or DoorDash) (a "TPS") in connection with delivery or catering services related to your Shoppe (recognizing that though the TPS may pay you an amount equal to the purchase price charged to the customer less a commission, other fees, and any discounts, credits, or coupons applied to that order, such commission, fees, discounts, credits, and coupons will not be deducted from your Net Sales).
Source: Item 6 — OTHER FEES (FDD pages 31–42)
What This Means (2025 FDD)
According to Carvel's 2025 Franchise Disclosure Document, 'Net Sales' encompasses all revenues generated by the Shoppe, regardless of the payment method, including cash, check, credit, or other forms of exchange. This broad definition includes all money and credit received from the sale of approved products and tangible property, as well as revenue from services performed at or in connection with the Shoppe.
Specifically, Net Sales includes revenue from both off-premises services like catering and delivery, and on-premises services such as games, gambling machines, or third-party advertising within the Shoppe. It also covers any other services or activities that utilize the Carvel system, trademarks, or products similar to the approved products. This ensures that all income streams associated with the Carvel business are included in the calculation of Net Sales.
Furthermore, unless otherwise specified in writing by Carvel, Net Sales includes all ancillary charges or fees, such as delivery fees and other service charges, whether paid directly by the customer or through a third-party service like Uber Eats or DoorDash. Even if these third-party services deduct commissions, fees, discounts, or coupons, these deductions are not subtracted from the franchisee's Net Sales. This comprehensive definition is important because many of Carvel's fees, such as the advertising fee, are calculated as a percentage of Net Sales, making it a critical factor in the financial operation of the franchise.