What revenues are specifically excluded from the calculation of 'Net Sales' for a Cicis restaurant?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
E.
Net Sales. "Net Sales" means all sales, revenues, charges and receipts received by you from your Restaurant or attributed to your Restaurant, including all revenue that is generated from the operation of any video game machines (including bulk machines) located at your Restaurant, whether from cash, check, credit or debit card, gift cards, barter exchange, trade credit or other credit transactions, or any other forms of payment, but excludes (i) Sales Tax (as defined below), (ii) any refunds made for your customers, and (iii) receipts from the sale of products from vending machines located at your Restaurant.
Net Sales includes all insurance proceeds you receive to replace revenue that you lose from the interruption of your Restaurant due to a casualty or other event covered by business interruption or similar insurance coverage. "Sales Tax" means all taxes collected directly from customers, based upon present or future Law, collected by you in the operation of your Restaurant, and any other tax, excise, or duty which is levied or assessed against you by any federal, state, municipal, or local authority, based on sales of specific merchandise sold at or from your Restaurant, provided that such taxes are actually transmitted to the appropriate taxing authority.
Source: Item 22 — CONTRACTS (FDD pages 64–65)
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, the definition of "Net Sales" is comprehensive, including all sales, revenues, charges, and receipts from the restaurant. This includes revenue from video game machines, and payments made via cash, check, credit/debit card, gift cards, barter exchange, trade credit, or other credit transactions. It also includes insurance proceeds received to replace revenue lost from business interruption.
However, the calculation of Net Sales for a Cicis restaurant specifically excludes a few items. These exclusions are (i) Sales Tax, (ii) any refunds made to customers, and (iii) receipts from the sale of products from vending machines located at the Restaurant.
Understanding what constitutes Net Sales is crucial for a Cicis franchisee because several fees, such as the Royalty Fee and Fund Contribution, are calculated as a percentage of Net Sales. Therefore, accurately tracking and reporting sales, while properly accounting for the exclusions, is essential for compliance with the franchise agreement and for managing the financial performance of the Cicis restaurant.