For Crave franchises, are taxes collected from customers included in Gross Sales?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
"Gross Sales" shall mean the total selling price of all services and products and all income of every other kind and nature related to the Franchised Business, whether for cash or credit and regardless of collection in the case of credit, and including any third-party delivery fees. If a cash shortage occurs, the amount of Gross Sales will be determined based on the records of the point-of-sale system and any cash shortage will not be considered in the determination. Gross Sales expressly excludes taxes collected from your customers and paid to the appropriate taxing authority and customer refunds or adjustments.
Source: Item 23 — RECEIPTS (FDD pages 63–253)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, Gross Sales do not include taxes collected from customers. Gross Sales for a Crave franchise are defined as the total selling price of all services and products, and all income of every kind related to the Franchised Business, whether for cash or credit. This includes any third-party delivery fees.
This definition is important for franchisees because the royalty fees owed to Crave are calculated as a percentage of Gross Sales. By excluding taxes collected from customers from the Gross Sales calculation, Crave ensures that franchisees are not paying royalties on money that is simply being passed through to taxing authorities.
Additionally, customer refunds or adjustments are also excluded from Gross Sales. If a cash shortage occurs, the amount of Gross Sales will be determined based on the records of the point-of-sale system and any cash shortage will not be considered in the determination.