What revenues are specifically excluded from 'Net Sales' when calculating sales for a Cicis franchise?
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, "Net Sales" are used to calculate royalty fees and marketing contributions. Net Sales include all sales, revenues, charges, and receipts received by the franchisee's restaurant or attributed to it. This encompasses revenue from various payment methods, including cash, checks, credit or debit cards, gift cards, barter exchange, trade credit, and revenue generated from video game machines located at the restaurant. Net Sales also include any insurance proceeds received to replace revenue lost due to business interruption.
However, the calculation of Net Sales for a Cicis restaurant specifically excludes certain items. These exclusions are (i) Sales Tax, which refers to all taxes collected directly from customers and remitted to the appropriate taxing authority, (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 Cicis franchisees as it directly impacts the royalty fees and marketing contributions they are obligated to pay. Franchisees should ensure accurate tracking and reporting of sales and exclusions to comply with the franchise agreement and avoid potential discrepancies or non-compliance fees.