Who is responsible for paying sales and other transfer taxes when Angry Chickz purchases the assets?
Angry_Chickz Franchise · 2025 FDDAnswer from 2025 FDD Document
- 15.3.4 Company shall pay Franchisee the purchase price (by corporate check, or offset, or a combination, as applicable) at closing of the purchase; the closing shall take place at a time and place designated by Company within ninety (90) calendar days after Franchisee receives Company's notice of exercise of the purchase option; at closing, Franchisee shall deliver to Company an assignment (and other documentation as Company deems appropriate) transferring good and marketable title to the assets selected by Company, free of liens and encumbrances, with all sales and other transfer taxes paid by Franchisee;
Source: Item 22 — CONTRACTS (FDD page 54)
What This Means (2025 FDD)
According to the 2025 Angry Chickz Franchise Disclosure Document, the franchisee is responsible for paying all sales and other transfer taxes when Angry Chickz exercises its purchase option. Specifically, when the franchisee transfers the assets back to Angry Chickz, the franchisee must ensure that the assets are free of liens and encumbrances and that all applicable taxes are paid.
This means that if Angry Chickz decides to buy back the franchise location's assets, the franchisee will need to factor in these tax obligations when assessing the financial implications of the sale. The franchisee is responsible for ensuring these taxes are paid before transferring the assets.
This allocation of tax responsibility is a significant point for potential franchisees to consider. It ensures that Angry Chickz receives the assets without any encumbrances or outstanding tax liabilities, placing the onus on the franchisee to handle these obligations during the transfer process.