For Crave franchises, what is included in the definition of "Gross Sales"?

According to Crave's 2025 Franchise Disclosure Document, "Gross Sales" is defined as the total selling price of all services and products, encompassing all income of every kind related to the Franchised Business. This includes both cash and credit transactions, irrespective of whether the credit has been collected. It also explicitly includes any third-party delivery fees.

For a prospective Crave franchisee, this definition is crucial because royalty fees are typically calculated as a percentage of Gross Sales. Therefore, understanding what constitutes Gross Sales is essential for accurately calculating royalty payments. The inclusion of all income, regardless of its nature or how it's received, means that franchisees must track all revenue streams meticulously.

The definition also provides some exclusions. Specifically, Gross Sales expressly excludes taxes collected from customers that are then paid to the appropriate taxing authority. Additionally, customer refunds or adjustments are also excluded from the Gross Sales calculation. This clarification helps franchisees understand what amounts can be deducted before calculating their royalty obligations.

Finally, the document specifies that if a cash shortage occurs, the amount of Gross Sales will be determined based on the records of the point-of-sale system, and the cash shortage will not be considered in the determination. This protects the franchisee from paying royalties on money that was never actually received due to theft or error, provided accurate records are maintained.