How are income taxes handled for Bananas Smoothies Frozen Yogurt as a limited liability company?
Bananas_Smoothies_Frozen_Yogurt Franchise · 2025 FDDAnswer from 2025 FDD Document
As a limited liability company, the Company is treated as a partnership for federal and substantially all state income tax purposes. Accordingly, no provision has been made for income taxes in the accompanying financial statements, since all items of income or loss are required to be reported on the income tax returns of the members, who are responsible for any taxes thereon. The Company files income tax returns in the U.S. federal jurisdiction and in various states.
Source: Item 23 — RECEIPT (FDD pages 58–231)
What This Means (2025 FDD)
According to the 2025 FDD, Bananas Smoothies Frozen Yogurt, as a limited liability company, is treated as a partnership for federal and substantially all state income tax purposes. This means that the company itself does not pay income taxes directly. Instead, all items of income or loss are reported on the income tax returns of the members, who are then responsible for paying any taxes due on their share of the company's income.
For a prospective Bananas Smoothies Frozen Yogurt franchisee, this is an important consideration. As a member of the LLC, the franchisee will need to report their share of the franchise's income or losses on their personal tax return and pay any applicable taxes. This also means that the franchisee can potentially deduct any losses incurred by the franchise on their personal tax return, subject to certain limitations.
The FDD specifies that Everything Yogurt Brands, LLC, files income tax returns in the U.S. federal jurisdiction and in various states. Franchisees should consult with a tax advisor to understand the specific tax implications of owning and operating a Bananas Smoothies Frozen Yogurt franchise in their particular state and individual circumstances. Understanding these tax responsibilities is crucial for financial planning and ensuring compliance with tax laws.