What revenues are included in the definition of 'Net Sales' for a Moes Southwest Grill restaurant?

According to Moe's Southwest Grill's 2025 Franchise Disclosure Document, "Net Sales" encompasses all revenues generated by a restaurant, whether the sales are evidenced by cash, check, credit, charge, account, barter, or exchange. This broad definition means that virtually all forms of payment and transactions contribute to the calculation of net sales for a Moe's Southwest Grill location. However, certain items are specifically excluded from the calculation of net sales.

The following items are not included in "Net Sales": the initial sales or reloading of gift cards, discounts, the sale of food or merchandise for which refunds have been made in good faith to customers, the discounted portion of employee meals, sales, meals, use or excise tax imposed by a governmental authority directly on sales and collected from customers (provided that the amount for the tax is added to the selling price or absorbed therein and is actually paid by you to a governmental authority), the sale of equipment used in the operation of the Restaurant, or tips. These exclusions provide a more accurate representation of the restaurant's actual sales performance by removing items that do not directly reflect revenue from food and beverage sales.

For a prospective franchisee, understanding the definition of "Net Sales" is crucial because it forms the basis for calculating royalties and other fees payable to Moe's Southwest Grill. It also impacts the financial performance representations provided in Item 19 of the FDD, which are based on net sales figures. Franchisees should pay close attention to what is included and excluded from net sales to accurately assess their financial performance and obligations. Consulting with financial and legal advisors is recommended to fully understand the implications of this definition.