What is the definition of 'Net Sales' as used in Item 19 for Checkers restaurants?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
As used in this Item 19, "Net Sales" means all revenue derived from operating the Franchised Restaurant, including the aggregate of all sales amounts from food, beverages and other products sold and services rendered at the Premises or otherwise rendered in connection with the Franchised Restaurant, and all monies derived from sales at or away from the Franchised Restaurant, whether from cash, check, credit or debit card, barter exchange, trade credit, or other credit transactions, but: (1) excluding all federal, state or municipal sales, use or service taxes collected from customers and paid to the appropriate taxing authority; and (2) reduced by the amount of any documented refunds, credits, allowances, adjustments, promotional discounts, and charge-backs the Franchised Restaurant provides to customers in good faith.
Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 72–78)
What This Means (2025 FDD)
According to Checkers's 2025 Franchise Disclosure Document, 'Net Sales' is defined within Item 19 as it relates to the financial performance representations of the franchise. Net Sales encompasses all revenue generated from the operation of a franchised Checkers restaurant. This includes all sales amounts from food, beverages, and other products and services sold at the restaurant. It also includes all money derived from sales, whether those sales occur at the physical restaurant location or away from it, and regardless of the method of payment, such as cash, check, credit or debit card, barter exchange, trade credit, or other credit transactions.
However, the definition of Net Sales also includes specific exclusions and reductions. Checkers specifies that Net Sales does not include any federal, state, or municipal sales, use, or service taxes that are collected from customers and then paid to the appropriate taxing authority. Additionally, the Net Sales figure is reduced by the amount of any documented refunds, credits, allowances, adjustments, promotional discounts, and charge-backs that the franchised restaurant provides to customers in good faith.
For a prospective Checkers franchisee, understanding this definition is crucial because Net Sales is the foundation upon which royalties are calculated and financial performance is evaluated. The Item 19 tables provide data on average and median Net Sales for various categories of restaurants, and these figures are used to project potential earnings. Therefore, knowing exactly what constitutes Net Sales—and what is excluded—is essential for making informed financial decisions about investing in a Checkers franchise.