What is the All Team franchisee's responsibility regarding taxes and assessments on the collateral?
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, the franchisee is responsible for the taxes and assessments related to the franchise agreement and the agency's operation. Specifically, the franchisee must make timely filings of all tax returns and pay all taxes levied or assessed. Furthermore, the franchisee is obligated to indemnify or reimburse All Team and its affiliates for all capital, gross receipts, sales, and other taxes and assessments imposed by any state or local governmental authority resulting from the agency's business or the license of any of All Team's intangible property. This includes taxes that All Team or its affiliates are required to pay or that the franchisee withholds. However, this obligation does not extend to income-type taxes imposed on All Team or its affiliates' income.
This means that as an All Team franchisee, you will need to ensure that all tax returns are filed on time and that all applicable taxes are paid when due. Additionally, you may be required to cover taxes and assessments imposed on All Team due to your agency's operations or the use of All Team's intangible property. It is important to note that All Team is not required to inform you of any federal, state, municipal, or local law, rule, regulation, ordinance code, or tax, making it your responsibility to stay informed and compliant with all applicable tax laws.
This requirement is fairly standard in franchising, as franchisees typically operate as independent business owners responsible for their own tax obligations. However, the added responsibility of indemnifying All Team for certain taxes related to the agency's business or the use of All Team's intangible property is something a prospective franchisee should carefully consider. It would be prudent to consult with a tax professional to fully understand the potential tax liabilities and ensure compliance with all applicable regulations.