What is included in the definition of 'Gross Receipts' for a Jersey Mike's franchise?
Jersey_Mikes Franchise · 2025 FDDAnswer from 2025 FDD Document
1 Gross Receipts. "Gross Receipts" includes the total of all sales of food products, beverages, other merchandise and products, and services to your customers, whether or not sold or performed at or from the Jersey Mike's Franchised Restaurant (including off site sales and catering sales), regardless of whether the sales were made in compliance with the Franchise Agreement, less sales, use or service taxes collected and paid to the appropriate taxing authority, and customer refunds, discounts, and coupons.
Source: Item 6 — OTHER FEES (FDD pages 15–24)
What This Means (2025 FDD)
According to Jersey Mike's 2025 Franchise Disclosure Document, "Gross Receipts" is comprehensively defined for calculating royalty and advertising fees. It encompasses the total revenue from all sales of food, beverages, merchandise, products, and services to customers. This includes sales made at the Jersey Mike's restaurant, off-site sales, and catering sales, irrespective of whether these sales fully comply with the Franchise Agreement.
However, certain deductions are permitted when calculating Gross Receipts. Franchisees can subtract sales, use, or service taxes that they collect and remit to the appropriate taxing authorities. Additionally, customer refunds, discounts, and coupons are also deductible from the total sales figure to arrive at the Gross Receipts amount. This adjusted figure is what Jersey Mike's uses to calculate the franchisee's royalty fees and advertising contributions.
This definition is crucial for franchisees as it directly impacts the amount of royalty and advertising fees they owe to Jersey Mike's. Understanding what constitutes Gross Receipts and what deductions are allowed ensures accurate reporting and payment, avoiding potential discrepancies or disputes with the franchisor. Franchisees should pay close attention to this definition and maintain meticulous records of all sales, taxes, refunds, discounts, and coupons to ensure compliance.