How does the Franchise Agreement define 'Gross Revenues' for a Southern Steer business?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
Gross Revenues is defined in the Franchise Agreement as sales from all products and services sold from, thru, at or in connection with Your Southern Steer Business, whether cash, credit (regardless of collection), barter or otherwise, exclusive of applicable sales, use or service taxes.
Gross Revenues includes sales from all products and services sold for on-Site or off-Site consumption, including without limitation products and services delivered to customers and products and services sold wholesale, if any.
The term "Gross Revenues" also includes the proceeds received or realized by You in connection with any business interruption insurance maintained by You or for Your benefit.
Excluded from the definition of Gross Revenues are sales, use or gross receipts taxes collected from customers and thereafter paid directly to the appropriate taxing authority and any bonafide refunds made to customers.
If You have not timely reported Your Gross Revenues to Us for any reporting period, then We shall be authorized, at Our option, to debit Your account for the higher of: (a) the fees transferred from Your account (or otherwise paid to Us through other means) for the last reporting period for which a report of Your Gross Revenues was provided to Us, or (b) an estimated amount due.
Source: Item 6 — ITEM. 6 OTHER FEES (FDD pages 11–16)
What This Means (2025 FDD)
According to Southern Steer's 2025 Franchise Disclosure Document, Gross Revenues are defined as the total income from all products and services sold through the Southern Steer business, encompassing cash, credit (regardless of collection status), barter, or other forms of payment, but excluding applicable sales, use, or service taxes. This definition includes sales from both on-site and off-site consumption, such as products delivered to customers and wholesale sales, if any.
Gross Revenues also incorporate proceeds from any business interruption insurance maintained by the franchisee. However, the definition specifically excludes sales, use, or gross receipts taxes collected from customers and then remitted to the appropriate taxing authority, as well as any legitimate refunds issued to customers.
It's important to note that if a Southern Steer franchisee fails to report Gross Revenues in a timely manner, Southern Steer has the right to debit the franchisee's account for either the fees transferred (or otherwise paid) for the last reporting period with a provided Gross Revenues report or an estimated amount due. This highlights the importance of accurate and timely reporting to avoid potential discrepancies and unauthorized debits.
Understanding the components of Gross Revenues is crucial for franchisees as it directly impacts royalty payments, brand fund contributions, and other fees calculated as a percentage of revenue. Franchisees should ensure they have a clear understanding of what constitutes Gross Revenues and maintain accurate records to facilitate proper reporting and payment of fees to Southern Steer.