Can an Ella Cafe franchisee deduct employee discounts from Gross Sales?

According to Ella Cafe's 2024 Franchise Disclosure Document, franchisees can deduct the value of employee discounts from gross sales under specific conditions. Gross Sales is defined as the total Selling Price of all services and products and all income of every other kind and nature related to the Coffee House. This includes income from catering and special events, as well as the full value of beverages or meals provided to employees as a benefit of their employment.

However, Ella Cafe franchisees are allowed to deduct the value of any employee discounts that are given during the week in which the food and beverages are provided. This means that if an employee receives a discount on a meal or beverage, the franchisee does not have to include the discounted amount in their gross sales calculation, provided the discount is given in the same week the food and beverages are provided.

This deduction applies whether the sales are for cash or credit, and regardless of whether the franchisee has collected payment for credit sales. This specific allowance for deducting employee discounts can help franchisees manage their reported gross sales more accurately, potentially reducing the royalty fees owed to Ella Cafe, which are typically calculated as a percentage of gross sales.