What sums are excluded from Chop5 Salad Kitchen's Gross Sales calculation?

According to Chop5 Salad Kitchen's 2024 Franchise Disclosure Document, Gross Sales are defined as all gross sums billed or collected from goods and services, plus other sums collected from the Restaurant's operation, including advertising revenues, sponsorship fees, and business interruption insurance proceeds. However, certain items are specifically excluded from the Gross Sales calculation. Understanding these exclusions is important because many fees payable to Chop5 Salad Kitchen are calculated as a percentage of Gross Sales.

The following items are excluded from Gross Sales: (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. These exclusions provide some relief to the franchisee by reducing the base upon which royalties and other fees are calculated.

Additionally, the FDD notes that the Manual may include policies governing the treatment of gift card proceeds and details on calculating Gross Sales related to customer loyalty program purchases and redemptions. Prospective Chop5 Salad Kitchen franchisees should carefully review the Manual to fully understand how these items are treated, as they can impact the reported Gross Sales and, consequently, the fees owed to the franchisor.