When are Gross Revenues deemed received by a Crepe De Licious franchisee?
Crepe_De_Licious Franchise · 2025 FDDAnswer from 2025 FDD Document
-
- Gross Revenues. The term "Gross Revenues" means the revenues you receive from the sale of all products and services sold at, from, or through your Crepe de licious Business, whether or not sold or performed at or from the Crepe de licious Business, including the full redemption value of any gift certificate or coupon sold for use at the Crepe de licious Business (fees retained by or paid to third party sellers of such gift certificates or coupons are not excluded from this calculation), and all other income and revenue of every other kind and nature related to the Crepe de licious Business or Crepe de licious Business operation, whether for cash or credit, and regardless of collection in the case of credit, but not including: (a) any sales taxes or other taxes you collect from customers for, and thereafter pay directly to, the appropriate taxing authority; or (b) any bona fide refunds you make to customers. Gross Revenues are deemed received by you at the time the products or services from which they were derived are delivered or rendered, or at the time the relevant sale takes place, whichever occurs first, regardless of whether final payment (e.g., collection on an account receivable) actually has been received by you. If you have not timely reported your Crepe de licious Business' Gross Revenues to us for any reporting period, then we shall be authorized, at our option, to debit your account for the higher of: (a) the fees transferred from your account for the last reporting period for which a report of your Crepe de licious Business' Gross Revenues was provided to us; or (b) an estimated amount due.
Source: Item 6 — OTHER FEES (FDD pages 12–18)
What This Means (2025 FDD)
According to Crepe De Licious's 2025 Franchise Disclosure Document, Gross Revenues are considered received by the franchisee when the products or services are delivered or rendered, or when the sale takes place, whichever comes first. This holds true regardless of whether the franchisee has actually received final payment, such as collection on an account receivable.
This definition is important because many fees payable to Crepe De Licious, such as the Royalty Fee (6% of Gross Revenues) and the Advertising Fee (3% of Gross Revenues), are calculated based on Gross Revenues. The timing of when revenue is 'deemed received' directly impacts when these fees are due, regardless of the franchisee's actual cash flow situation.
For a prospective Crepe De Licious franchisee, this means they need to be prepared to pay royalty and advertising fees even on sales for which they haven't yet been paid. This could create a cash flow challenge, especially for new businesses. Franchisees should ensure they have sufficient working capital to cover these fees, even if customers pay on credit or there are outstanding receivables.