Is Aw liable for any taxes levied against the franchisee or their assets?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
We will have no liability for any sales, use, excise, income, gross receipts, property, or other taxes levied against you or your assets or on us in connection with the business you conduct, or any payments you make to us pursuant to this Agreement (except for our own income taxes).
You agree to indemnify, defend and hold us, our shareholders, directors, officers, employees, agents and assignees, harmless against and to reimburse us for all such obligations, damages, and taxes for which we are held liable and for all costs we reasonably incur in the defense of any such claim brought against us or in any such action in which we are named as a party, arising out of your operation of the Papa Ray's Pizza Restaurant, and/or arising out of your breach of this Agreement, including without limitation actual and consequential damages, reasonable attorneys', accountants', and expert witness fees, costs of investigation and proof of facts, court costs, other litigation expenses and travel and living expenses.
Source: Item 22 — CONTRACTS (FDD pages 39–40)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, Aw is not liable for any taxes levied against the franchisee or their assets. Specifically, Aw will not be liable for any sales, use, excise, income, gross receipts, property, or other taxes levied against the franchisee or their assets. This also applies to taxes levied against Aw in connection with the business the franchisee conducts, or any payments the franchisee makes to Aw pursuant to the Franchise Agreement, except for Aw's own income taxes.
Furthermore, the franchisee agrees to indemnify, defend, and hold Aw harmless against and to reimburse Aw for all such obligations, damages, and taxes for which Aw is held liable. This includes all costs Aw reasonably incurs in the defense of any claim brought against them arising out of the franchisee's operation of the Papa Ray's Pizza Restaurant, or arising out of the franchisee's breach of the Franchise Agreement. This indemnification covers actual and consequential damages, reasonable attorneys', accountants', and expert witness fees, costs of investigation and proof of facts, court costs, other litigation expenses, and travel and living expenses.
This section of the Franchise Agreement clarifies that the franchisee is responsible for all taxes associated with their business and assets. It also ensures that Aw is protected from any tax liabilities or related costs arising from the franchisee's actions or business operations. This is a common provision in franchise agreements, as it clearly defines the financial responsibilities of each party and protects the franchisor from liabilities caused by the franchisee's business.