Are sales of used equipment included in the Gross Sales calculation for Crave Cookies?

According to Crave Cookies' 2025 Franchise Disclosure Document, the calculation of Gross Sales specifically excludes sales of used equipment not in the ordinary course of business. Gross Sales for a Crave Cookies franchise 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, whether for cash or credit.

However, this definition has some exceptions. Gross Sales does not include bona fide refunds to customers, sales taxes collected by the franchisee, sales of used equipment not in the ordinary course of business, or sales of prepaid cards or similar products. It is important to note that while the sale of prepaid cards is excluded from the gross sales calculation, the redemption of any such card or product will be included in Gross Sales.

For a prospective Crave Cookies franchisee, this means that when calculating royalties and other fees based on Gross Sales, they should not include revenue from occasional sales of used equipment (such as replacing old ovens or display cases). This exclusion can help lower the royalty burden in specific periods where such sales occur. However, franchisees must maintain accurate records to properly document these exclusions and should be prepared to demonstrate that such sales were not in the ordinary course of business if Crave Cookies Franchising conducts an audit.

It is important for franchisees to understand what constitutes 'ordinary course of business' in this context. Typically, this refers to the regular day-to-day activities of selling cookies and related products. The sale of a major piece of equipment would generally not fall under this definition. Franchisees should seek clarification from Crave Cookies Franchising if they are unsure whether a particular sale of equipment qualifies for exclusion from Gross Sales.