To whom do income and expenses for Aw pass through directly?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
Taxes on Income-The Company has elected to be taxed as a limited liability corporation for federal and state income tax purposes. Income and expenses for the Company pass through directly to the members' and is reported on their individual income tax returns.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 39)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, the company has elected to be taxed as a limited liability corporation for federal and state income tax purposes. This means that the income and expenses of Aw pass through directly to its members. Consequently, these items are reported on the individual income tax returns of Aw's members.
This pass-through taxation structure is common for LLCs and S corporations, where the business itself does not pay corporate income tax. Instead, the profits and losses are passed on to the owners (members in the case of an LLC), who then report them on their personal tax returns. This can simplify the tax process and potentially reduce the overall tax burden, depending on the individual circumstances of the members.
For a prospective Aw franchisee, this information is primarily relevant to understanding the tax implications for the franchisor, Rayyan Pizza Franchise LLC, rather than the franchisee's own tax obligations. However, it can provide insight into the financial structure and management of the company. Franchisees should consult with their own tax advisors to understand the tax implications of owning and operating an Aw franchise.