Is an Aunt Millies Bakeries franchisee required to maintain unemployment insurance for their employees?
Aunt_Millies_Bakeries Franchise · 2025 FDDAnswer from 2025 FDD Document
applicable payroll-related taxes with respect to any employees of DISTRIBUTOR. DISTRIBUTOR in all events shall be and remain responsible for insuring that all persons engaged by DISTRIBUTOR comply fully with all the terms and conditions of this Agreement. Any breach of this Agreement by any person engaged by DISTRIBUTOR shall be deemed to be a breach by DISTRIBUTOR.
§4.4 NON-COMPLIANCE: Failure to carry out the obligations listed in this Article or elsewhere in this Agreement shall be considered a breach of this Agreement and shall entitle AUNT MILLIE'S to terminate this Agreement as more specifically set forth in Article 9 hereof, except that DISTRIBUTOR shall not be responsible for failures caused by Force Majeure; provided, however, that an event of Force Majeure shall not excuse DISTRIBUTOR from any obligations to pay for Products pursuant to Article 3.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD page 31)
What This Means (2025 FDD)
According to Aunt Millies Bakeries' 2025 Franchise Disclosure Document, franchisees are responsible for handling all applicable payroll-related taxes for their employees. This obligation is outlined in Article 4.3 of the agreement, which states that the distributor (franchisee) must ensure all individuals they engage comply with the agreement's terms. A breach by any person engaged by the distributor is considered a breach by the distributor themselves.
This means that as an Aunt Millies Bakeries franchisee, you are responsible for ensuring that you meet all legal requirements related to your employees' payroll, including unemployment insurance if required by law. Failure to comply with these obligations is considered a breach of the Distribution Agreement. Aunt Millie's Bakeries could then terminate the agreement, as detailed in Article 9, if the franchisee fails to meet the obligations outlined in Article 4.
While the FDD excerpt does not explicitly state that franchisees must obtain unemployment insurance, the responsibility for all payroll-related taxes implies that franchisees must comply with all applicable employment laws. Therefore, if unemployment insurance is a legally mandated payroll tax in the relevant jurisdiction, the franchisee would be responsible for obtaining it. Prospective franchisees should consult with legal and financial professionals to ensure they understand and comply with all applicable employment laws and tax obligations.