What taxes does the All Team franchisee agree to indemnify or reimburse ATFC for?
All_Team Franchise · 2025 FDDAnswer from 2025 FDD Document
FRANCHISEE agrees to indemnify and/or reimburse ATFC and its affiliates for all capital, gross receipts, sales, and other taxes and assessments imposed by any applicable state or local governmental authority as a result of the conduct of the Agency's business or the license of any of ATFC's or its affiliates' intangible property to FRANCHISEE (whether required to be paid by ATFC or its affiliates, withheld by FRANCHISEE or otherwise).
FRANCHISEE's obligation to indemnify or reimburse ATFC or its affiliates for these taxes does not extend to income-type taxes which a state or local government imposes on ATFC or its affiliates' income
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 indemnifying or reimbursing All Team and its affiliates for specific taxes and assessments. This includes capital, gross receipts, sales, and other taxes imposed by state or local governmental authorities. This obligation arises from the operation of the All Team agency's business or the licensing of any of All Team's intangible property to the franchisee. This responsibility applies whether All Team or its affiliates are required to pay the taxes, or whether the franchisee withholds them.
However, the franchisee's obligation to cover these taxes does not extend to income-type taxes that a state or local government imposes on All Team or its affiliates' income. This clarifies that the franchisee is not responsible for All Team's corporate income taxes.
This section of the Franchise Agreement outlines the franchisee's tax responsibilities, ensuring that All Team is protected from tax liabilities related to the franchisee's business operations and the use of All Team's licensed property. Franchisees should consult with a tax professional to fully understand their obligations under this agreement.