Gross sales are not profit

Gross sales are the total revenue a unit brings in before any costs. They are the most common figure in franchise performance disclosures and the easiest to misread.

What comes out before an owner keeps anything

• Cost of goods and supplies
• Labor
• Rent and occupancy costs
• Royalty and marketing fees
• Insurance, utilities, technology fees
• Loan payments and owner compensation

Our wording rule

We describe gross sales as gross sales. We don't call them "earnings" or "income" unless the source itself reports an owner-level profit figure, and even then we use the source's exact definition.

A useful habit

When you see a sales figure, check whether the source also reports any cost or margin data. If it doesn't, the sales figure alone can't tell you what an owner takes home.