What are the exclusions to Gross Revenue for a Devon Creek franchise?
Devon_Creek Franchise · 2024 FDDAnswer from 2024 FDD Document
Gross Revenues also include all proceeds from any business interruption insurance.
Excluded from Gross Revenues are: (1) sales taxes and other taxes separately stated that Franchisee collects from customers and pays to taxing authorities; (2) refunds and credits made in good faith to arms' length customers, provided such credits or refunds are made in accordance with Franchisor's standards and specifications; and (3) the discount value of any voucher or other allowance that Franchisor authorizes at the time Franchisee redeems the customer's voucher or allowance.
Source: Item 22 — CONTRACTS (FDD page 45)
What This Means (2024 FDD)
According to Devon Creek's 2024 Franchise Disclosure Document, gross revenues for a franchise include proceeds from business interruption insurance. However, there are specific exclusions to what counts as gross revenue for a Devon Creek franchise.
Specifically, sales taxes and other taxes that the franchisee collects from customers and then remits to taxing authorities are excluded from gross revenues. Additionally, refunds and credits that a Devon Creek franchisee makes in good faith to customers are excluded, provided these are in line with Devon Creek's standards.
Finally, the discount value of any voucher or allowance that Devon Creek authorizes when a franchisee redeems a customer's voucher or allowance is also excluded from gross revenues. These exclusions provide clarity for franchisees in calculating their royalty fees and Brand Development Fund contributions, as these are based on a percentage of gross revenue.