For Chop5 Salad Kitchen, what must a franchisee do with Gross Sales?

itted by the Franchise Agreement. |

Notes:

• 1. Nature and Manner of Payment: All fees are imposed by and payable to us except: (a) you spend the Local Advertising Commitment directly with local suppliers; and (b) you pay the cooperative advertising fee directly to your advertising cooperative (we may instead require you to pay this fee to us, in which case we will remit the fee to the cooperative on your behalf). All fees are nonrefundable and uniformly imposed. You must sign an ACH Authorization Form (attached to the Franchise Agreement as ATTACHMENT "E") permitting us to electronically debit your designated bank account for all amounts owed to us and our affiliates (other than fees due within 15 days after signing the Franchise Agreement). You must deposit all Gross Sales into the bank account and ensure sufficient funds are available for withdrawal before each due date. You are responsible for all taxes imposed on you or us based on products, intangible property (including trademarks) or services we provide to you.
• 1. Definitions: As used in this Disclosure Document, the following capitalized terms have the meanings given to them below:
  • "Brand Fund" means the brand and system development fund that we intend to administer to promote public recognition of our brand and improve our System. We have not established the Brand Fund as of the issuance date of this Disclosure Document.
  • "Gross Sales" means all gross sums you bill or collect from all goods and services you sell, plus all other sums you collect from the operation of your Restaurant, including any advertising revenues, sponsorship fees and business interruption insurance proceeds. Gross Sales excludes: (a) sales or use taxes; (b) amounts refunded to customers; (c) revenues from the sale of furniture, fixtures and equipment in the ordinary course of business; (d) the value of approved coupons, vouchers or similar items at the time of redemption; and (e) tips paid to and retained by staff members as a gratuity. The Manual may include policies governing the manner in which proceeds from the sale of gift cards are treated for purposes of calculating Gross Sales. The Manual may also provide details on the calculation of Gross Sales relating to

qualifying purchases and redemptions by members under a customer loyalty program.

"Minority Interest Transfer" means a Transfer by an owner of less than 20% of the ownership interests in the entity that is the "franchisee" or "area developer" (other than a Transfer that results in the Operating Partner owning less than 5% of the ownership interests in the entity that is "franchisee" or "area developer", as applicable).

"Operating Partner" means the owner you appoint and we approve with primary responsibility for the overall management and operation of your Restaurant.

"Permitted Transfer" means: (a) a Transfer from one owner to another owner who was an approved owner prior to the Transfer (other than a Transfer that results in the Operating Partner owning less than 5% of the franchised business); and/or (b) a Transfer to a newly established business entity with respect to which the transferring owners collectively own and control 100% of the ownership interests.

"Technology Systems" means all information and communication technology systems that we designate, which may include computer systems, point-of-sale systems, online ordering systems, webcam systems, telecommunications systems, security systems, music systems, and similar systems, together with the associated hardware, software (including cloud-based software) and related equipment, software applications, mobile apps and third-party services relating to the establishment, use, maintenance, monitoring, security or improvement of these systems.

"Transfer" means a transfer or assignment of: (a) the Franchise Agreement or ADA; (b) the Restaurant's assets (other than the sale of fixtures or equipment in the ordinary course of business); (c) any ownership interest in the entity that is the "franchisee" or "area developer"; or (d) the franchised business you conduct under the Franchise Agreement or ADA.

"Travel Expenses" means all travel, meals, lodging, local transportation and other living expenses and costs incurred: (a) by us and our trainers, field support personnel, auditors and/or other representatives to visit your Restaurant; or (b) by you or your personnel to attend training programs or conferences.

• 1. CPI Adjustments: All fees expressed as a fixed dollar amount are subject to adjustment based on changes to the Consumer Price Index (CPI) in the United States.

Source: Item 6 — OTHER FEES (FDD pages 12–17)