For federal and state income tax purposes, how has Aw 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 franchisee, this information is primarily relevant to understanding how the franchisor's financial results are reported and taxed. It confirms that Aw itself does not pay corporate income taxes directly. Instead, the profits or losses are passed on to the members (owners) of the LLC.

This pass-through taxation is a common structure for LLCs and S corporations, and it avoids the double taxation that can occur with C corporations (where the corporation pays taxes on its profits, and then shareholders pay taxes again on dividends received). Franchisees should consult with their own tax advisor to understand the full implications of Aw's tax structure and how it might affect their own tax liabilities as members or owners of the LLC.