Does the Golden Corral franchise agreement define 'Gross Sales'?
Golden_Corral Franchise · 2025 FDDAnswer from 2025 FDD Document
- 4.7 "Gross Sales" Defined: Gross sales, as used in this Agreement, shall include all receipts from the sale of food, beverages, and merchandise or services in or from the franchised business and all other income of every kind and nature related to the franchised business and/or generated or initiated from the Restaurant premises (including offpremises catering, vending machine, electronic or other game machine receipts and employee meals at discounted sales prices) whether for cash or credit, and regardless of collection in the case of credit; provided, however, that "gross sales" shall not include refunds or any sales taxes or other taxes collected by Franchisee for transmittal to the appropriate taxing authority. Franchisee shall report gross sales in the form and manner as set forth in Section 4.4 hereof and/or in the form and manner as otherwise prescribed by Franchisor in the Manuals or in writing.
Source: Item 22 — CONTRACTS (FDD pages 84–85)
What This Means (2025 FDD)
According to the 2025 Golden Corral Franchise Disclosure Document, the franchise agreement does define "Gross Sales".
The agreement specifies that gross sales include all income from the sale of food, beverages, merchandise, and services, encompassing various sources like off-premises catering, vending machines, electronic games, and employee meals at discounted prices. This includes both cash and credit transactions, regardless of whether the payment has been collected. This definition is important because franchise fees are often calculated as a percentage of gross sales.
However, the definition of gross sales for a Golden Corral franchise does not include refunds, sales taxes, or other taxes collected for transmittal to the appropriate taxing authority. The franchisee is required to report gross sales in a format outlined in Section 4.4 of the agreement, as well as in the manner prescribed by Golden Corral in its manuals or in writing. This ensures that Golden Corral can accurately calculate royalties and other fees based on the franchisee's revenue.