Are sales taxes included in the Gross Sales calculation for a Golden Krust Caribbean Restaurant?
Golden_Krust_Caribbean_Restaurant Franchise · 2024 FDDAnswer from 2024 FDD Document
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. We reserve the right to modify our policies consistent with restaurant industry practices regarding revenue recognition, revenue reporting, and the inclusion in or exclusion of certain revenue from "Gross Sales" as circumstances, business practices, and technology change. A current list of exclusions can be found in the Brand Standards Manual.
Source: Item 22 — CONTRACTS (FDD page 35)
What This Means (2024 FDD)
According to Golden Krust Caribbean Restaurant's 2024 Franchise Disclosure Document, Gross Sales do not include sales taxes. Gross Sales for a Golden Krust Caribbean Restaurant are defined as the total revenue from all products and services, including cash and credit sales, whether on the premises, by delivery, catering, or other methods. This encompasses all income related to the restaurant, regardless of collection status for credit sales or the permissibility of the sales method.
However, the definition explicitly excludes sales taxes or other taxes collected from guests that are then passed on to the appropriate taxing authority. Also excluded are proceeds from the sale of gift cards or stored value cards, and guest refunds made in good faith.
Golden Krust Caribbean Restaurant retains the right to modify its policies regarding revenue recognition and the inclusion or exclusion of certain revenue from Gross Sales, aligning with restaurant industry practices as circumstances, business practices, and technology evolve. A current list of exclusions can be found in the Brand Standards Manual.