For federal income tax purposes, is Bath Tune Up considered a disregarded entity?

According to the 2025 Bath Tune-Up FDD, HFC KTU LLC, which operates Bath Tune-Up, is considered a disregarded entity for federal income tax purposes. This means that for federal income tax purposes, Bath Tune-Up's financial results are included in the federal income tax return filed by its ultimate parent company, JM Family Enterprises, Inc. Bath Tune-Up, as the disregarded entity, does not record a provision for federal or state income taxes for financial reporting purposes.

For a Bath Tune-Up franchisee, this information is relevant because it clarifies that the franchisor itself does not pay federal income taxes directly. Instead, its income and expenses are consolidated into the tax return of its parent company. This structure simplifies the tax reporting process for Bath Tune-Up at the entity level.

It is important for prospective franchisees to understand the tax implications of the franchise structure, but this information primarily affects the franchisor's corporate structure rather than the franchisee's individual tax obligations. Franchisees should consult with their own tax advisor to understand how their individual business income from the Bath Tune-Up franchise will be taxed.