For Moes Southwest Grill, what sales are specifically excluded from the calculation of 'Net Sales'?
Moes_Southwest_Grill Franchise · 2025 FDDAnswer from 2025 FDD Document
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. (d) the discounted portion of employee meals, (e) 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, (f) the sale of equipment used in the operation of the Restaurant, or (g) tips.
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 are a critical figure used for calculating various fees. However, certain transactions are excluded from the calculation of net sales. These exclusions provide clarity for franchisees on what revenue is subject to these fees.
Specifically, the following are not included in the calculation of net sales: the initial sales or reloading of gift cards, discounts, refunds made in good faith to customers for food or merchandise, the discounted portion of employee meals, sales, meals, use, or excise taxes imposed by a governmental authority directly on sales and collected from customers (provided the tax amount is added to the selling price or absorbed therein and is actually paid to a governmental authority), the sale of equipment used in the operation of the Restaurant, and tips.
Understanding these exclusions is important for Moe's Southwest Grill franchisees as it directly impacts the amount of fees they will owe. By excluding these items, the franchisor ensures that franchisees are not paying fees on revenue that is either not retained by the franchisee (such as taxes) or represents a cost to the franchisee (such as refunds and employee discounts).