For Dq Treat, what is excluded from the calculation of 'Food Sales'?
Dq_Treat Franchise · 2025 FDDAnswer from 2025 FDD Document
- iii. "Food Sales" means the total revenues and receipts from the sale of Food Menu products sold by the Store, whether paid for by cash, credit (not adjusted for credit card or other fees) or gift card, barter, or otherwise,
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 the 2025 Dq Treat FDD, the calculation of 'Food Sales' excludes sales taxes and revenues and receipts arising directly from the franchisee's sale of gift cards. This definition is important because Dq Treat franchisees may be required to pay a continuing license fee based on a percentage of Food Sales.
Specifically, after the first partial month and the next 36 consecutive months after the effective date of the agreement, the franchisee must pay a monthly continuing license fee to Dq Treat of 5% of Food Sales minus Base Food Sales. Base Food Sales is defined as the highest Food Sales achieved during any consecutive full 12-month period occurring between months 1-36 after the effective date.
Therefore, a Dq Treat franchisee will not pay a percentage of revenue generated from sales taxes or gift cards. This exclusion reduces the amount on which the 5% continuing license fee is calculated, potentially lowering the franchisee's monthly payments to Dq Treat. Franchisees should be aware of this definition when projecting their potential revenue and royalty obligations.