What taxes are Belocal franchisees NOT responsible for paying related to the service agreement?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee will be responsible for all sales, use, and excise taxes, and any other similar taxes, duties, and charges of any kind imposed by any federal, state, or local governmental entity on any amounts payable by Franchisee hereunder; provided, that, in no event will Franchisee pay or be responsible for any taxes imposed on, or regarding, N2's income, revenues, gross receipts, personnel, or real or personal property or other assets.
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, franchisees are responsible for sales, use, and excise taxes, as well as any other similar taxes, duties, and charges imposed by federal, state, or local governmental entities on amounts they pay under the service agreement. However, Belocal franchisees are not responsible for taxes imposed on or regarding N2's income, revenues, gross receipts, personnel, or real or personal property or other assets.
In practical terms, this means that while a Belocal franchisee must pay sales tax on their service fees, they are not liable for Belocal's corporate income taxes or taxes related to Belocal's employees or property. This division of tax responsibilities is typical in franchising, where the franchisee operates as an independent business owner.
Prospective Belocal franchisees should be aware of their tax obligations and consult with a tax professional to ensure compliance with all applicable laws and regulations. Understanding these tax responsibilities is crucial for managing the financial aspects of the franchise and avoiding potential penalties.