For federal and state income tax purposes, how has the Aw Company elected to be taxed?

According to Aw's 2025 Franchise Disclosure Document, the company has elected to be taxed as a limited liability corporation (LLC) for both federal and state income tax purposes. This means that the income and expenses of Aw pass through directly to its members, who then report these on their individual income tax returns.

For a prospective Aw franchisee, this is important because it clarifies that the company itself does not pay corporate income taxes. Instead, the tax liability falls on the individual members or owners of the LLC. This is a common structure for smaller businesses and franchises, as it avoids the double taxation that can occur with corporations (where the corporation pays taxes on its profits, and then shareholders pay taxes on dividends received).

As a potential franchisee, it would be prudent to consult with a tax advisor to understand the implications of this pass-through taxation for your personal tax situation. You should consider how the income from the franchise will affect your overall tax liability and plan accordingly. This information is found in the financial statement notes within the FDD.