What is the definition of Net Revenues for a Nothing Bundt Cakes franchise?
Nothing_Bundt_Cakes Franchise · 2025 FDDAnswer from 2025 FDD Document
You shall input all sales only into the Bakery's POS System and supply us with all Net Revenues data that we specified in the Franchise Agreement and in our Operations Manuals or as we direct from time to time for the purpose of calculating the weekly Royalty.
Each week begins on Monday and ends on Sunday.
All Net Revenues data, which is electronically provided to us on a weekly basis through the Bakery's POS System, shall be certified to be true and correct by you.
We shall review the Net Revenues data you provide to us and shall deduct the required Royalty and advertising fees due to us under the Franchise Agreement.
Presently, these amounts are collected on Tuesday of each week via an electronic funds transfer program (the "EFT Program") under which we automatically deduct such amounts from your bank account.
To make arrangements for EFT, you must sign our then-current form of Electronic Funds Withdrawal Authorization, the current version of which is Exhibit 3 to the Franchise Agreement.
You must designate a bank account for use in connection with your Bakery and deposit all Net Revenues into the designated bank account.
If we are unable to collect the Net Revenue data through the Bakery's POS System, we will process an EFT for the subject week in an amount equal to the 11% of the weekly Net Revenues for the previous week based on your point of sales system's records, which represents Royalties and advertising fees due under the Franchise Agreement, as well as any late fee and interest on past-due amounts as provided for herein.
We reserve the right to require you to pay any fees due under the Franchise Agreement by such other means and at such periods as we may specify from time to time, including any payment made to our affiliates.
With respect to third-party delivery service providers, if a provider remits to you the purchase price charged to the Guest less a commission or other fee or charge, the commission or other fee or charge will be included in the calculation of Net Revenues.
Source: Item 6 — OTHER FEES (FDD pages 23–30)
What This Means (2025 FDD)
I am unable to provide a definition of Net Revenues for a Nothing Bundt Cakes franchise based on the 2025 Franchise Disclosure Document excerpts provided. While the excerpts mention "Net Revenues" in the context of royalty fees, advertising fees, and other payments, they do not include a specific definition of what constitutes Net Revenues. The excerpts indicate that Net Revenues data is used to calculate weekly royalty and advertising fees, and that this data is electronically provided through the Bakery's POS system.
Without a clear definition in the provided excerpts, it is difficult to assess exactly how Nothing Bundt Cakes calculates this crucial figure. Franchisees need to understand precisely what is included and excluded from Net Revenues, as this directly impacts the royalties and fees they owe to Nothing Bundt Cakes. For example, it is not clear whether discounts, employee meals, or taxes are deducted from gross sales to arrive at Net Revenues.
A prospective Nothing Bundt Cakes franchisee should ask the franchisor for the precise definition of "Net Revenues," including any exclusions or deductions from gross sales. Understanding this definition is essential for accurately forecasting revenue, calculating royalty payments, and assessing the overall profitability of the franchise.