What is included in 'Gross Revenue' for a Devon Creek franchise, besides revenues and income?
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.
- 6.1.3 Gross Revenue Reports.
Franchisee shall, on Wednesday's of each calendar weekly for the prior week, furnish Franchisor with a report showing Franchisee's Gross Revenue at or from the Franchised Business and/or made pursuant to the rights granted hereunder during the immediately prior calendar month (the "Gross Revenue Report").
The Gross Revenue Report shall be in such form and shall contain such information as Franchisor may from time to time prescribe.
At Franchisor's discretion, Franchisee shall submit, or grant Franchisor access to, the Gross Revenue Report by an electronic transfer of data via the computer information systems ("Computer System") that Franchisor requires Franchisee to use in the operation of the Franchised Business.
- 6.1.4 Method of Payment.
Franchisee shall, together with the submission of the Gross Revenue Report, pay Franchisor the Royalty Fee and the Brand Development Fund Contribution, as defined and more particularly described in Article 13, then due.
At Franchisor's request, Franchisee must execute documents that allow Franchisor to automatically take the Royalty Fee and Brand Development Fund Contribution due as well as other sums due Franchisor, from business bank accounts via electronic funds transfers.
Franchisee's failure to allow electronic funds transfers on an ongoing basis is a material breach of this Agreement.
If Franchisee fails to timely report Gross Revenue, then, in addition to a late fee and interest pursuant to Sections 6.2 and 6.3 hereof, Franchisor shall collect one hundred twenty percent (120%) of the last Royalty Fee payable.
Franchisor shall reconcile amounts when Gross Revenues are reported.
Source: Item 22 — CONTRACTS (FDD page 45)
What This Means (2024 FDD)
According to Devon Creek's 2024 Franchise Disclosure Document, Gross Revenues include all proceeds from any business interruption insurance. However, sales taxes and other taxes separately stated that the franchisee collects from customers and pays to taxing authorities are excluded from Gross Revenues. Also excluded are refunds and credits made in good faith to arms' length customers, provided such credits or refunds are made in accordance with Devon Creek's standards and specifications. The discount value of any voucher or other allowance that Devon Creek authorizes at the time the franchisee redeems the customer's voucher or allowance is also excluded from Gross Revenues.
Franchisees are required to furnish Devon Creek with a Gross Revenue Report on Wednesdays of each calendar week for the prior week. This report must show the franchisee's Gross Revenue at or from the Franchised Business and/or made pursuant to the rights granted under the franchise agreement during the immediately prior calendar month. The Gross Revenue Report must be in such form and contain such information as Devon Creek may from time to time prescribe.
Devon Creek may require franchisees to submit, or grant Devon Creek access to, the Gross Revenue Report by an electronic transfer of data via the computer information systems that Devon Creek requires franchisees to use in the operation of the Franchised Business. Franchisees must pay Devon Creek the Royalty Fee and the Brand Development Fund Contribution together with the submission of the Gross Revenue Report. Devon Creek may request that franchisees execute documents that allow Devon Creek to automatically take the Royalty Fee and Brand Development Fund Contribution due as well as other sums due Devon Creek, from business bank accounts via electronic funds transfers. Failure to allow electronic funds transfers on an ongoing basis is a material breach of the Franchise Agreement.
If a franchisee fails to timely report Gross Revenue, Devon Creek will collect one hundred twenty percent (120%) of the last Royalty Fee payable, in addition to a late fee and interest. Devon Creek will reconcile amounts when Gross Revenues are reported.