How might Angry Chickz collect sales, use, service, or value-added taxes from the franchisee?
Angry_Chickz Franchise · 2025 FDDAnswer from 2025 FDD Document
- (b) the amount of all sales taxes, use taxes, service taxes, personal property taxes, value added taxes, and similar taxes, which may be imposed upon Franchisee, but required to be collected or paid by Company (i) on account of Franchisee's Gross Sales, or (ii) on account of fees collected by Company from Franchisee (but excluding Company's ordinary income taxes). Company, in its discretion, may collect the taxes in the same manner as the Continuing Royalty is collected and promptly pay the tax collections to the appropriate Governmental Authority; provided, however, that unless Company so elects, it shall be Franchisee's responsibility to pay all sales, use or other taxes imposed now or in the future by any Governmental Authorities on fees paid by Franchisee to Company; and
Source: Item 22 — CONTRACTS (FDD page 54)
What This Means (2025 FDD)
According to Angry Chickz's 2025 Franchise Disclosure Document, Angry Chickz may collect sales, use, service, personal property, and value-added taxes from franchisees. This applies to taxes imposed on the franchisee but required to be collected or paid by Angry Chickz due to the franchisee's gross sales or fees collected by Angry Chickz from the franchisee. However, this excludes Angry Chickz's ordinary income taxes.
Angry Chickz has the discretion to collect these taxes in the same manner as the continuing royalty fees. If Angry Chickz elects to do so, they will promptly remit the tax collections to the appropriate governmental authority. However, if Angry Chickz does not elect to collect the taxes, it remains the franchisee's responsibility to pay all sales, use, and other taxes imposed by governmental authorities on fees paid by the franchisee to Angry Chickz.
This means that an Angry Chickz franchisee needs to be prepared to handle sales tax and other tax obligations, either by paying them directly or potentially having Angry Chickz collect and remit them on their behalf. It is important for prospective franchisees to clarify with Angry Chickz their preferred method of tax collection and payment to ensure compliance with all applicable tax laws and regulations.