What is included in the definition of 'Gross Sales' for a Chicken Guy franchise?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
- **D.
Gross Sales.** Gross Sales shall include all revenue from the sale of all food products, beverages and all other income of every kind and nature related to the Franchised Restaurant (including the redemption value of stored value gift cards and gift certificates when purchases are made) whether for cash or credit and regardless of collection in the case of credit, monies or credit received from the sale of food and merchandise, from tangible property of every kind and nature, promotional or otherwise, and for services performed from or at the Franchised Restaurant, including, but not limited to, such off-premises services as catering and delivery.
Gross Sales do not include sales taxes or other taxes collected from customers for transmittal to the appropriate taxing authority, promotional discounts and coupons, the value of any employee discounts provided to Franchisee's bona fide employees during the fiscal week in which the discounts are provided, all proceeds from the sale of gift certificates or stored value cards, customer refunds made in good faith to customers, or the sale of equipment used in the operation of the Franchised Restaurant.
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2025 FDD)
According to Chicken Guy's 2025 Franchise Disclosure Document, Gross Sales include all revenue from the sale of food products, beverages, and all other income related to the franchised restaurant. This includes revenue from cash or credit transactions, monies received from the sale of food and merchandise, tangible property, promotional items, and services performed at the restaurant, including off-premises services like catering and delivery. The redemption value of stored value gift cards and gift certificates when purchases are made is also included in Gross Sales.
However, Gross Sales do not include certain items. These exclusions are sales taxes or other taxes collected from customers for transmittal to the appropriate taxing authority, promotional discounts and coupons, the value of employee discounts provided to bona fide employees during the fiscal week in which the discounts are provided, all proceeds from the sale of gift certificates or stored value cards, customer refunds made in good faith to customers, or the sale of equipment used in the operation of the franchised restaurant.
Understanding what constitutes Gross Sales is crucial for a Chicken Guy franchisee because the royalty fee payable to Chicken Guy is calculated as a percentage of Gross Sales. Accurate reporting of Gross Sales is essential for compliance with the franchise agreement and to avoid potential disputes with the franchisor. Franchisees should carefully track all sales and ensure they understand the inclusions and exclusions in the definition of Gross Sales to accurately calculate and remit royalty fees.