For Moes Southwest Grill, what revenues are included in the definition of 'Net Sales'?
Moes_Southwest_Grill Franchise · 2025 FDDAnswer from 2025 FDD Document
nd them. We endeavor to impose these fees uniformly but reserve the right to make variances in special circumstances. We reserve the right to collect all fees due to us under the Franchise Agreement through EFT. We may change the Payment Due Date, and any other due dates, in the Manuals or in a written notice to you.
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- "Net Sales" means all revenues generated by your Restaurant or conducted from or with respect to the Restaurant, whether the sales are evidenced by cash, check, credit, charge, account, barter or exchange. Net Sales includes monies, gift card redemptions, or credit generated by or received from (i) the sale of Approved Products or tangible property of every kind
and nature, promotional or otherwise, anywhere and (ii) services performed from, at, or in connection with the Restaurant, including (x) off-premises services (such as catering and delivery), (y) on-premises services (such as games, gambling machines, or third-party advertising within the Restaurant), or (z) any other services or activities that use either the System, the Marks, or products that are the same as or similar to the Approved Products. The foregoing list is not intended to provide approval for such activities, which may be conducted only if approved. Unless we specify otherwise in writing, Net Sales shall include all ancillary charges or fees, including delivery fees and other service charges, that are paid to you by a customer or by a third-party delivery or catering service (e.g., Uber Eats, Postmates, Grubhub, ezCater, or DoorDash) (a "TPS") in connection with delivery or catering services related to your Restaurant (recognizing that though the TPS may pay you an amount equal to the purchase price charged to the customer less a commission, other fees and any discounts, credits, or coupons applied to the order, such commission, fees, discounts, credits, and coupons will not be deducted from your Net Sales). Net Sales will not include (a) the initial sales or reloading of gift cards, (b) discounts, (c) the sale of food or merchandise for which refunds have been made in good faith to customers.
Source: Item 6 — Other Fees (FDD pages 30–41)
What This Means (2025 FDD)
According to Moe's Southwest Grill's 2025 Franchise Disclosure Document, 'Net Sales' encompasses all revenues generated by the restaurant, regardless of the payment method (cash, check, credit, etc.). This includes revenue from the sale of approved products and tangible property, as well as revenue from services performed at or in connection with the restaurant. These services include both off-premises services like catering and delivery, and on-premises services such as games or third-party advertising. Net Sales also include any ancillary charges or fees, including delivery fees and other service charges, even those paid via third-party delivery services.
However, the definition of Net Sales for Moe's Southwest Grill specifically excludes certain items. These exclusions include the initial sales or reloading of gift cards, discounts, and refunds made in good faith to customers. It also excludes the discounted portion of employee meals, sales, meals, use, or excise taxes collected from customers and remitted to governmental authorities, the sale of equipment used in the restaurant's operation, and tips.
For a prospective Moe's Southwest Grill franchisee, understanding what constitutes Net Sales is crucial because it directly impacts royalty fees and other financial obligations to the franchisor. Franchisees should pay close attention to the inclusions and exclusions to accurately calculate and report their sales figures. The explicit inclusion of delivery fees, even when processed through third-party services, is particularly important in today's market where delivery sales are significant. Franchisees should also note that the list of included activities is not an approval for those activities and that approval is needed to conduct those activities.