Under what circumstances will an Anago franchisee be required to reimburse the franchisor for tax payments?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
You will promptly pay when due all taxes required by any federal, state or local tax authority including unemployment taxes, withholding taxes, income taxes, tangible commercial personal property taxes, real estate taxes, intangible taxes and all other indebtedness You incur in the conduct of the Anago Unit Franchise. You will pay to Us an amount equal to any sales tax, goods and services taxes, gross receipts tax, or similar tax imposed on Us for any payments to Us required under this Agreement, unless the tax is measured by or involves the net income or Our corporate status in a state. If We pay any tax for which You are responsible, You will promptly reimburse Us the amount paid. If there is any bona fide dispute as to liability for taxes assessed or other indebtedness, You may contest the validity or the amount of the tax or indebtedness in accordance with procedures of the taxing authority or applicable law. However, You will not permit a tax sale or seizure by levy or signing or similar writ or warrant, or attachment by a creditor, to occur against any assets used in the Anago Unit Franchise.
Source: Item 23 — RECEIPTS (FDD pages 62–298)
What This Means (2025 FDD)
According to Anago's 2025 Franchise Disclosure Document, a franchisee must reimburse Anago for certain tax payments under specific conditions. The franchisee is responsible for promptly paying all taxes required by federal, state, and local tax authorities, including unemployment, withholding, income, tangible commercial personal property, real estate, and intangible taxes, as well as any other debts incurred while operating the Anago Unit Franchise.
Specifically, the franchisee will pay Anago an amount equal to any sales tax, goods and services taxes, gross receipts tax, or similar tax imposed on Anago for any payments required from the franchisee under the Franchise Agreement. This excludes taxes measured by Anago's net income or corporate status in a state.
If Anago pays any tax for which the franchisee is responsible, the franchisee must promptly reimburse Anago for the amount paid. However, the franchisee has the right to contest the validity or amount of taxes assessed if there is a legitimate dispute, following the procedures of the taxing authority or applicable law, provided that no tax sale or asset seizure occurs against assets used in the Anago Unit Franchise.