Is the redemption of prepaid cards included in Gross Sales for a Crave Cookies franchise?
Crave_Cookies Franchise · 2025 FDDAnswer from 2025 FDD Document
"Gross Sales" is defined in our franchise agreement as the total dollar amount of all sales generated through your business for a given period, including, but not limited to, payment for any services or products, including but not limited to, all revenues from sales at the premises and from direct delivery, catering, and/or delivery services through a third party, sold by you, whether for cash or credit. Gross Sales does not include (i) bona fide refunds to customers, (ii) sales taxes collected, (iii) sale of used equipment not in the ordinary course of business, (iv) sales of prepaid cards or similar products (but the redemption of any such card or product will be included in Gross Sales), or (v) delivery expenses or third-party platform charges.
Source: Item 23 — RECEIPTS (FDD pages 47–194)
What This Means (2025 FDD)
According to Crave Cookies's 2025 Franchise Disclosure Document, the redemption of prepaid cards is included when calculating gross sales. The FDD specifies that while the initial sale of prepaid cards is excluded from gross sales, the revenue generated when customers redeem these cards for products or services is included in the gross sales calculation.
For a prospective Crave Cookies franchisee, this means that the total revenue reported, and on which royalties are based, will include the value of redeemed prepaid cards. This is a common practice in the franchise industry, as it accurately reflects the total sales generated by the business.
It is important for franchisees to keep accurate records of prepaid card sales and redemptions to ensure proper calculation of gross sales and royalty payments. This distinction ensures that franchisees are not paying royalties on money that has not yet been used to purchase goods or services, but are paying royalties when those cards are actually used at the Crave Cookies location.