For Nothing Bundt Cakes, what is included in the definition of 'Net Revenues' when calculating the Royalty fee?
Nothing_Bundt_Cakes Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Royalty | 6% of Bakery's weekly Net Revenues | Due on Tuesday of each week on Net Revenues during previous week ending Sunday | "Net Revenues" mean all of your revenue from operating your Bakery, including delivery, shipping, and E-Commerce Revenues, revenues paid to you by any third-party delivery provider in connection with delivery services related to your Bakery and revenues made from sales to National Accounts (See Item 11), but excluding taxes collected from Guests and paid to taxing authorities and reduced by amount of any documented refunds, credits, allowances, and charge-backs made by the Bakery in accordance with our standards and specifications. All royalty payments must be made by EFT. (See Note 2 for more information) |
Source: Item 6 — OTHER FEES (FDD pages 23–30)
What This Means (2025 FDD)
According to Nothing Bundt Cakes' 2025 Franchise Disclosure Document, "Net Revenues" for royalty calculation includes all revenue from operating the bakery. This encompasses revenue from delivery, shipping, E-Commerce, payments from third-party delivery providers, and sales to National Accounts. However, it excludes taxes collected from guests that are then paid to taxing authorities. Additionally, the "Net Revenues" figure is reduced by the amount of any documented refunds, credits, allowances, and charge-backs made by the Bakery according to Nothing Bundt Cakes' standards and specifications. The royalty fee is 6% of the bakery's weekly Net Revenues.
This definition is important for prospective franchisees as it clarifies what income is subject to the 6% royalty fee. By including delivery, shipping, and E-Commerce revenues, Nothing Bundt Cakes ensures that all income streams are considered when calculating royalties. The exclusion of taxes collected and the deduction of refunds and credits provide some relief to the franchisee, aligning the royalty calculation with the bakery's actual earnings.
Franchisees must accurately track and report all revenue streams, refunds, credits, and taxes to ensure correct royalty payments. The requirement to use the Bakery's POS system and provide weekly Net Revenues data emphasizes the importance of accurate record-keeping. Franchisees should familiarize themselves with Nothing Bundt Cakes' standards and specifications for refunds, credits, and charge-backs to ensure compliance and avoid disputes over royalty calculations.