What is the minimum franchise tax Apricot Lane pays in California?
Apricot_Lane Franchise · 2025 FDDAnswer from 2025 FDD Document
e fee for additional stores for an existing franchisee is $20,000.
Income Taxes
The Company has elected to be taxed as an S corporation for federal income tax and California franchise tax purposes. As a result, the Company does not pay federal corporate tax on its income; instead, the stockholders pay tax on their respective shares of such income. California has adopted similar provisions, except that there is
Source: Item 23 — RECEIPTS (FDD pages 51–222)
What This Means (2025 FDD)
According to the 2025 Apricot Lane Franchise Disclosure Document, the company has elected to be taxed as an S corporation for federal income tax and California franchise tax purposes. Because of this election, Apricot Lane itself does not pay federal corporate tax on its income. Instead, the stockholders pay tax on their respective shares of such income.
California has adopted similar provisions, but with two key differences. First, there is a 1.5% franchise tax assessed on California taxable income. Second, there is a minimum tax of $800.
This means that Apricot Lane must pay at least $800 in franchise taxes to the state of California, regardless of its income. If the 1.5% tax on taxable income exceeds $800, then Apricot Lane would pay the higher amount. This is a standard practice for S corporations in California.