What happens if an All County franchisee fails to pay federal or state taxes?

According to All County's 2025 Franchise Disclosure Document, if a franchisee fails to pay federal or state income, service, sales, employment-related, or other taxes due on the operations of the business, it constitutes a breach of the franchise agreement. However, there is an exception: if the franchisee is, in good faith, legally contesting their liability for such taxes, this non-payment does not trigger a breach. This clause protects franchisees who have a legitimate dispute with tax authorities and are actively pursuing a legal challenge.

In practical terms, this means an All County franchisee must ensure timely payment of all applicable taxes related to their business. Failure to do so can lead to serious consequences, including potential termination of the franchise agreement. The franchisee has a short window to rectify the situation.

However, All County provides a safeguard for franchisees involved in legitimate tax disputes. If a franchisee believes they do not owe the taxes and are contesting the liability through legal channels in good faith, All County will not consider this a breach of contract. This protects franchisees from being penalized while resolving tax disputes through appropriate legal means. It is important for prospective franchisees to understand this clause and ensure they maintain proper documentation and communication with All County if they ever find themselves in a tax dispute situation.