For Nothing Bundt Cakes, what is included in the definition of 'Net Revenues' for the purposes of Item 19?
Nothing_Bundt_Cakes Franchise · 2025 FDDAnswer from 2025 FDD Document
For purposes of this Part I, "Net Revenues" includes all revenues generated from all business conducted at or from a Bakery during the 2024 Fiscal Year, including amounts received from the sale, shipping and delivery of food items, amounts received through the E-Commerce program and from gift card redemptions, and other products and services, merchandise, and tangible property of any nature whatsoever, whether in cash or for credit, and whether collected or not collected. "Net Revenues" does not include the amount of any applicable sales tax imposed by any federal, state, municipal or other governmental authority if such taxes are stated separately when the Guest is charged, and franchisee pays such amounts as and when due to the appropriate taxing authority. Also excluded from Net Revenues are the amount of any documented refunds, chargebacks, credits, and allowances given to Guests in good faith pursuant to our standard procedures for issuing such refunds.
Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATION (FDD pages 71–80)
What This Means (2025 FDD)
According to Nothing Bundt Cakes' 2025 Franchise Disclosure Document, 'Net Revenues' for Item 19 encompasses all income generated from the bakery during the 2024 fiscal year. This includes revenue from the sale, shipping, and delivery of food items, as well as income from the E-Commerce program and gift card redemptions. It also covers other products, services, merchandise, and tangible property, regardless of whether payment is received in cash or credit, and whether the amounts have been collected.
However, the definition of 'Net Revenues' for Nothing Bundt Cakes specifically excludes certain items. Sales taxes imposed by any governmental authority are excluded if they are separately stated when the customer is charged and if the franchisee pays these taxes to the appropriate authority. Additionally, documented refunds, chargebacks, credits, and allowances given to customers in good faith, following standard procedures, are also excluded from 'Net Revenues'.
For a prospective Nothing Bundt Cakes franchisee, understanding this definition is crucial for interpreting the financial performance representations in Item 19. It clarifies what income is considered when evaluating a bakery's revenue potential and profitability. Franchisees should pay close attention to the inclusions and exclusions to accurately assess their potential financial performance and to ensure proper accounting practices.