When are Gross Sales required to be reported for a Golden Krust Caribbean Restaurant franchise?
Golden_Krust_Caribbean_Restaurant Franchise · 2024 FDDAnswer from 2024 FDD Document
ns set forth in this Paragraph have been satisfied.
III. FEES
A. INITIAL FRANCHISE FEE
When you sign this Agreement, you must pay us a nonrecurring initial franchise fee in the amount of Forty Thousand Dollars ($40,000.00). That amount is fully earned by us upon receipt and is nonrefundable.
B. ROYALTY
You agree to pay us a weekly royalty ("Royalty") equal to 5% of the Gross Sales or $250.00, whichever sum is greater. Gross Sales are to be reported on the 3rd business day of the month. We reserve the right to change the frequency of your Gross Sales reporting requirement. Royalties are payable to us by our weekly sweep via authorized electronic funds transfer (EFT) from your operating account based on the Gross Sales of the Restaurant.
C. DEFINITION OF "GROSS SALES"
As used in this Agreement, the term "Gross Sales" means the aggregate amount of all revenues generated from the sale of all products and services sold and all other income of every kind related to the Restaurant, whether for cash or credit (and regardless of collection in the case of credit), whether from sales on the Premises, by delivery, from catering, or other sales methods (whether the sales method is permitted or not). You may not reduce Gross Sales by the amount of any discounts provided to employees, family members and other businesses that you control. Gross Sales do not include sales taxes or other taxes collected from guests for transmittal to the appropriate taxing authority, proceeds from the sale of gift cards or stored value cards, and guest refunds made in good faith.
Source: Item 22 — CONTRACTS (FDD page 35)
What This Means (2024 FDD)
According to Golden Krust Caribbean Restaurant's 2024 Franchise Disclosure Document, franchisees are required to report their Gross Sales on the 3rd business day of each month. The royalty fee, which is 5% of Gross Sales or $250.00 (whichever is greater), is then payable to Golden Krust Franchising, Inc. via weekly electronic funds transfer (EFT) from the franchisee's operating account.
The term "Gross Sales" is defined as the total revenue from all products and services sold at the restaurant, including cash and credit sales, sales on the premises, deliveries, catering, and other sales methods. Gross Sales should not be reduced by employee discounts or discounts to family members or other businesses controlled by the franchisee. Exclusions from Gross Sales include sales taxes, proceeds from gift cards, and guest refunds made in good faith.
Golden Krust Franchising, Inc. retains the right to modify its policies regarding revenue recognition, reporting, and the inclusion or exclusion of certain revenue from Gross Sales, consistent with restaurant industry practices. A current list of exclusions can be found in the Brand Standards Manual. Franchisees should be aware that the frequency of Gross Sales reporting may be subject to change at the discretion of Golden Krust Franchising, Inc.