How does the Crave Franchise Agreement define 'Gross Sales'?

According to Crave's 2025 Franchise Disclosure Document, Gross Sales are defined as the total selling price of all services and products, including all income related to the Franchised Business, whether the payment is in cash or credit. This definition also includes any third-party delivery fees. The gross sales amount will be determined based on the point-of-sale system records, even if there is a cash shortage.

For a prospective Crave franchisee, this means that royalty fees will be calculated on all revenue generated by the business, encompassing not only direct sales but also income from other sources like delivery services. It is important to note that the amount is based on the selling price, regardless of whether the payment has been collected in the case of credit sales. This comprehensive definition ensures that all revenue streams are included when calculating royalties.

However, the definition of Gross Sales expressly excludes taxes collected from customers that are then paid to the appropriate taxing authority, as well as customer refunds or adjustments. This exclusion is beneficial for the franchisee, as it prevents them from paying royalties on money that is simply being passed through to a third party or returned to a customer. This is a fairly standard practice in franchising, as it ensures that franchisees are only paying royalties on their actual revenue.

Overall, the definition of Gross Sales in the Crave franchise agreement is fairly standard and comprehensive. It is important for prospective franchisees to understand this definition, as it will directly impact the amount of royalties they are required to pay.