How are Gross Sales calculated for Crave Cookies deliveries using a third-party delivery service?
Crave_Cookies Franchise · 2025 FDDAnswer from 2025 FDD Document
- 7.8 Royalty on Third-Party Delivery Service. If Crave Cookies Franchising, LLC requires or approves Franchisee's use of a third-party delivery service, Gross Sales on deliveries will be calculated on the amount paid by the customer to the delivery service (not counting any delivery fee, service charge, or gratuity paid by the customer), rather than the amount paid by the delivery service to Franchisee.
Source: Item 22 — CONTRACTS (FDD page 47)
What This Means (2025 FDD)
According to Crave Cookies' 2025 Franchise Disclosure Document, if the company requires or approves a franchisee's use of a third-party delivery service, gross sales are calculated based on the amount the customer pays to the delivery service. This calculation excludes any delivery fees, service charges, or gratuities paid by the customer.
For a prospective Crave Cookies franchisee, this means that royalty fees will be based on the customer's payment to the third-party delivery service, not on the amount the delivery service remits to the franchisee. This is a crucial distinction because the delivery service typically retains a portion of the customer's payment as a fee for its services.
Therefore, the franchisee will pay royalties on a higher gross sales figure than the actual amount they receive from the delivery service. This policy could impact the franchisee's profitability, as they are responsible for royalty payments on money they never directly receive. Franchisees should factor this into their financial projections and understand the potential impact on their bottom line.