Under what circumstances must an Azal Coffee franchisee reimburse the franchisor for taxes?
Azal_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
provided in Section 4.13 of this Agreement.
8.13 Compliance with Laws and Other Obligations; Taxes.
You must obtain and keep in force every registration, charter, license, and permit required for the Franchise Business. In addition to all other references in this Agreement, you shall comply with all requirements of federal, state and local laws, rules, regulations, and orders related to the operation of your Store, including but not limited to obtaining the appropriate licenses and permits required by your local or state government and are required to operate the Store in compliance with the requirements of all federal, state, and local laws, rules, regulations, or ordinances that govern food preparation and service and Store sanitary conditions, the federal Clean Air Act and various implementing state laws require certain state and local areas to meet national air quality standards limiting emissions of ozone, carbon monoxide and particulate matters, including caps on emissions from commercial food preparation, all federal, state, and local laws, rules, regulations, and ordinances that govern your employment relationship with your employees, and other laws, rules and regulations that apply to business generally, such as the Americans With Disabilities Act, Fair Labor Standards Act, Family and Medical Leave Act, Affordable Care Act, Federal Wage and Hour Laws, Title VII of the Civil Rights Act, Age Discrimination in Employment Act, Affordable Care Act., Employee Retirement Income Security Act, and the Occupational Safety and Health Act, also apply to Stores, and comparable laws regulating minimum wage, overtime pay, recordkeeping, youth employment standards, and other aspects of employment), environmental regulation, and taxation.
You must pay, when due, all taxes of every kind applicable to the Franchise Business or the income of the Franchise Business, including all local, state, and federal taxes. We will not be responsible for any sales, use, service, occupation, excise, gross receipts, income, property, or other taxes, whether levied on you or the Franchise Business, due to the business you conduct (except for our income taxes). You are responsible for paying these taxes and must reimburse us for any taxes that we pay to any federal, state, or local taxing authority on account of your operations or payments that you make to us.
We may, but have no obligation to, advise you on legislative or other legal developments that may affect the Franchise Business. Any information we provide to you does not relieve you of your responsibility to consult with your own legal advisors regarding laws applicable to the Franchise Business.
Source: Item 22 — CONTRACTS (FDD page 51)
What This Means (2024 FDD)
According to Azal Coffee's 2024 Franchise Disclosure Document, franchisees are responsible for complying with all tax requirements related to their business. Specifically, franchisees must adhere to all federal, state, and local laws, rules, regulations, and orders related to the operation of their store, including taxation.
This means that Azal Coffee franchisees must obtain and maintain all necessary registrations, charters, licenses, and permits required for their franchise business. They are obligated to follow all tax-related laws and regulations at the federal, state, and local levels. This encompasses various aspects of taxation, ensuring that the Azal Coffee franchise operates in full compliance with applicable tax laws.
In addition to general compliance, franchisees are required to provide copies of all sales or similar tax returns and annual income tax returns to Azal Coffee. This obligation ensures that the franchisor has access to the franchisee's tax-related documents for oversight and compliance purposes. Failing to provide these required reports or financial statements in a timely manner may result in the franchisee being assessed liquidated damages under Section 15.7 of the agreement.