What is the All Team franchisee's responsibility regarding payment of taxes?
All_Team Franchise · 2025 FDDAnswer from 2025 FDD Document
ns specific to the activities franchised hereunder that affect the Agency, including federal, state, municipal and local laws and regulations. FRANCHISEE shall obtain all licenses and permits required by any applicable federal, state, municipal, and local law, rule, regulation ordinance and code. FRANCHISEE shall make timely filings of all tax returns and shall pay when due all taxes levied or assessed on, and related to this Agreement and the Agency. At no time is ATFC required to inform FRANCHISEE of any federal, state, municipal, or local law, rule, regulation, ordinance code, or tax. FRANCHISEE is solely responsible for complying with the requirements of the Americans with Disabilities Act ("ADA") in all respects, and nothing contained herein or in the Confidential Operation Manual shall be construed as or implied as imposing any obligation on ATFC or its affiliates in relation to the ADA.
Source: Item 22 — CONTRACTS (FDD pages 33–34)
What This Means (2025 FDD)
According to All Team's 2025 Franchise Disclosure Document, franchisees are responsible for the timely filing of all tax returns and the payment of all taxes levied or assessed on the franchise agreement and the agency itself. This includes federal, state, and local taxes. All Team is not required to inform the franchisee of any tax laws, rules, or regulations. Franchisees are also responsible for indemnifying or reimbursing All Team and its affiliates for capital, gross receipts, sales, and other taxes and assessments imposed by governmental authorities due to the agency's business or the licensing of All Team's intangible property. However, this indemnification does not extend to income taxes imposed on All Team or its affiliates' income.
This means that as an All Team franchisee, you must stay current with all applicable tax laws and ensure that all tax returns are filed on time and all tax obligations are paid when due. Failing to do so could result in penalties and legal issues. Additionally, you may be required to cover certain tax obligations of All Team if they arise from your operation of the franchise.
Franchisees are expected to handle all tax-related matters independently, without relying on All Team for guidance or information. This underscores the importance of consulting with a qualified tax professional to ensure compliance with all applicable tax laws and regulations. The franchisee bears the risk of non-compliance.
This is a fairly standard arrangement in franchising, where the franchisee is typically responsible for their own tax obligations. However, the added responsibility of indemnifying All Team for certain taxes is something a prospective franchisee should carefully consider and discuss with a financial advisor.