Is the redemption of prepaid cards included in the Gross Sales calculation for Crave Cookies?

According to Crave Cookies's 2025 Franchise Disclosure Document, the redemption of prepaid cards is included in the calculation of Gross Sales. Gross Sales is defined as the total dollar amount of all sales generated through the Business for a given period, including payment for any services or products sold by the Franchisee, whether for cash or credit.

However, the initial sale of prepaid cards themselves is excluded from the Gross Sales calculation. This means that when a customer purchases a gift card, that transaction is not immediately counted as part of the franchise's revenue for royalty calculation purposes. Instead, the revenue is recognized when the gift card is redeemed for goods or services at the Crave Cookies location.

This approach is fairly common in the franchise industry, as it aligns revenue recognition with the actual provision of goods or services. For a Crave Cookies franchisee, this means that royalty fees, which are a percentage of Gross Sales, are only paid when the value of the prepaid card is realized through a customer purchase. This can impact cash flow and financial reporting, so franchisees should understand this distinction when managing their business finances.