For Checkersrallys restaurants, what revenue is included in 'Net Sales'?
Checkersrallys 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 71–77)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, "Net Sales" encompasses all revenue generated from operating the franchised restaurant. This includes the total sales from food, beverages, and other products and services sold at the premises or in connection with the restaurant. The revenue includes all monies derived from sales at or away from the restaurant, regardless of the payment method, such as cash, check, credit or debit card, barter exchange, trade credit, or other credit transactions.
However, the definition of "Net Sales" for Checkersrallys specifically excludes certain items. It does not include federal, state, or municipal sales, use, or service taxes collected from customers and remitted 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 Checkersrallys franchisee, understanding this definition is crucial for accurately assessing potential revenue and calculating royalties, as royalty fees are based on a percentage of Net Sales. It is also important for financial planning and understanding the factors that can impact the reported sales figures. Franchisees should ensure they maintain proper documentation of all exclusions and reductions to accurately report Net Sales.