How does Dq Treat define 'Gross Sales' for a franchise?
Dq_Treat Franchise · 2025 FDDAnswer from 2025 FDD Document
- 16.12 Gross Sales means the total revenues and receipts from the sale of all products sold by the Restaurant, whether paid for by cash, credit (not adjusted for credit card fees) or gift card, barter, or otherwise, including sales of all products under
- any of the Trademarks as well as sales of other products, services and merchandise, whether or not identified by other brand names, and excluding sales taxes and revenues and receipts arising directly from Licensee's sale of gift cards.
Source: Item 17 — The following paragraph is added to the end of Item 17 of the Disclosure Document: (FDD pages 70–378)
What This Means (2025 FDD)
According to Dq Treat's 2025 Franchise Disclosure Document, Gross Sales are defined as the total revenue and receipts from all products sold by the Restaurant. This includes sales paid for via cash, credit (without adjusting for credit card fees), gift card, barter, or other methods. Gross sales include revenue from products sold under any of the Trademarks, as well as sales of other products, services, and merchandise, regardless of whether they are identified by other brand names.
However, the definition of Gross Sales specifically excludes sales taxes and revenues and receipts that come directly from the franchisee's sale of gift cards. This means that while the initial sale of a gift card is not included in gross sales, the redemption of that gift card for products at the Dq Treat location would be included.
Understanding the definition of Gross Sales is crucial for a prospective Dq Treat franchisee because it directly impacts the calculation of continuing license fees and sales promotion program fees payable to the franchisor. These fees are calculated as a percentage of Gross Sales, so accurately tracking and reporting all sales, and understanding what is included or excluded, is essential for financial compliance and profitability.