Who is the 1-800-GOT-JUNK? franchisee required to pay taxes to?
1_800_Got_Junk Franchise · 2025 FDDAnswer from 2025 FDD Document
Section 22 of the Franchise Agreement states that you will indemnify and hold us, and our subsidiaries, affiliates, shareholders, directors, officers, employees, agents, assignees and other franchisees; harmless against all liabilities, obligations, and consequential damages, taxes, costs, losses and actual legal expenses; any claim, litigation or other action or proceeding arising out of the operation of the franchised business.
However, you are not required to indemnify us for claims resulting solely from our breach of this Agreement or other wrongs we commit.
This provision may not be enforceable in Kansas unless separately negotiated and reasonable.
By signing this Addendum, you hereby agree that you separately considered and had an opportunity to consult legal counsel concerning this indemnity, and that you consider it reasonable.
Source: Item 22 — Contracts (FDD page 24)
What This Means (2025 FDD)
The 2025 Franchise Disclosure Document for 1-800-GOT-JUNK? states that franchisees are generally responsible for their own taxes related to operating the franchised business. However, the document includes an indemnity clause that could require a franchisee to cover 1-800-GOT-JUNK?'s taxes under certain circumstances.
Specifically, Section 22 of the Franchise Agreement, as referenced in the Kansas addendum, stipulates that franchisees will indemnify and hold 1-800-GOT-JUNK? harmless against all liabilities, obligations, consequential damages, taxes, costs, losses, and actual legal expenses arising from the operation of the franchised business. This means that if a claim, litigation, or other action occurs due to the franchisee's business operations, the franchisee might be responsible for covering 1-800-GOT-JUNK?'s tax liabilities resulting from that action.
However, the addendum also clarifies that franchisees are not required to indemnify 1-800-GOT-JUNK? for claims resulting solely from 1-800-GOT-JUNK?'s breach of the agreement or other wrongs committed by them. Furthermore, the enforceability of this provision in Kansas may depend on whether it was separately negotiated and deemed reasonable. Prospective franchisees in Kansas should seek legal counsel to fully understand the implications of this indemnity clause.
In summary, while franchisees are primarily responsible for their own business taxes, the indemnity clause in the 1-800-GOT-JUNK? franchise agreement could, under specific conditions, extend this responsibility to include covering 1-800-GOT-JUNK?'s tax liabilities arising from the franchisee's business operations. Franchisees should carefully review this clause and seek legal advice to understand its potential impact.