What are the specific obligations of Annex Brands franchisees regarding taxes, as detailed in Item 9?
Annex_Brands Franchise · 2025 FDDAnswer from 2025 FDD Document
Under this Agreement, no party is responsible for any obligations, debts or expenses of any other party.
INDEMNIFICATION. Franchisee agrees to indemnify and hold Franchisor and its affiliates, and the directors, officers, employees, agents and assignees of Franchisor and its affiliates, harmless against any liability for any claims arising out of the construction or operation of the Center or the performance by Franchisee of any obligation under this Agreement. For purposes of this indemnification obligation, claims will mean and include all liabilities, obligations, actual and consequential damages, taxes, and costs reasonably incurred in the defense of any claim, including reasonable accounting, expert and witness fees, reasonable attorneys' fees, costs of investigation and proof of facts, court costs, other litigation expenses, and travel and living expenses. Franchisor will have the right to defend any such claim in which Franchisor, any of its affiliates, or any director, officer, employee, agent or assignee of Franchisor or any of its affiliates, is named as a defendant. This indemnification obligation will continue in full force and effect subsequent to and notwithstanding any transfer, or the expiration, termination or nonrenewal of the Franchise. Franchisee specifically acknowledges that: (a) Franchisor does not have any reserved or general right to exercise control over, and does not exercise any direct or indirect control over, the day-to-day operation of the Center (including operations-related functions such as safety and secu
What This Means (2025 FDD)
According to Annex Brands' 2025 Franchise Disclosure Document, Item 9 provides a table summarizing the franchisee's obligations, but it does not specifically detail the obligations related to taxes. However, Item 22 addresses taxes within the context of indemnification. Franchisees are required to indemnify Annex Brands and its affiliates against any liabilities, including taxes, arising from the construction or operation of the franchise center or the franchisee's performance under the franchise agreement. This means that if a tax liability arises due to the franchisee's actions or the operation of their center, the franchisee is responsible for covering those costs.
This indemnification extends to all liabilities, obligations, damages, and costs reasonably incurred in defending any claim, including accounting, expert, and attorney fees. Annex Brands retains the right to defend any claim in which they or their affiliates are named as a defendant. This obligation remains in effect even after any transfer, expiration, termination, or nonrenewal of the franchise agreement.
In practical terms, this means that Annex Brands franchisees must ensure they operate their business in compliance with all applicable tax laws and regulations to avoid potential liabilities. They should maintain accurate records, file tax returns on time, and seek professional advice when necessary. Failure to do so could result in the franchisee being responsible for significant tax-related costs and legal fees, in addition to any penalties or interest assessed by tax authorities. Prospective franchisees should consult with a financial advisor and attorney to fully understand their tax obligations and the implications of the indemnification clause.