Will Belocal withhold income tax for the franchisee or their personnel?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
As an independent business, Franchisee is responsible for all tax reporting requirements for Franchisee and Franchisee's employees, contractors, and representatives.
Accordingly, Franchisee and Franchisor agree that Franchisor will not withhold, deduct, or pay income tax, social security, or any other payroll or other taxes or amounts for Franchisee's benefit or for the benefit of any personnel hired or contracted by Franchisee, including but not limited to, officers, directors, managers, employees, contractors, subcontractors, representatives, or agents ("Independent Staff").
Franchisee is solely responsible for filing all tax returns, tax declarations, and tax schedules, and for the payment of all taxes as required by law, including without limitation, local, state, and federal income taxes, Social Security taxes, Medicare taxes, unemployment compensation taxes, and any other federal, state, or local taxes, fees, or withholdings due for Franchisee.
Franchisee is responsible for withholding, accruing, and paying all income, Social Security, Medicare, unemployment compensation taxes, and any other federal, state, or local taxes, fees, or withholdings relating to all Independent Staff, if any, as well as all statutory insurance and other benefits required by law for Franchisee and any Independent Staff and all other benefits promised by Franchisee to any Independent Staff.
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, Belocal franchisees operate as independent businesses and are responsible for all tax reporting requirements for themselves and their personnel. This includes employees, contractors, and representatives. Belocal explicitly states that it will not withhold, deduct, or pay income tax, social security, or any other payroll taxes for the franchisee or their personnel.
As a Belocal franchisee, you are solely responsible for filing all tax returns, declarations, and schedules, and for paying all required taxes. These include local, state, and federal income taxes, Social Security taxes, Medicare taxes, unemployment compensation taxes, and any other federal, state, or local taxes, fees, or withholdings due for the franchisee.
Furthermore, if you hire any independent staff, you are responsible for withholding, accruing, and paying all income, Social Security, Medicare, and unemployment compensation taxes, as well as any other federal, state, or local taxes, fees, or withholdings related to them. You are also responsible for providing any statutory insurance and other benefits required by law for both yourself and any independent staff, as well as any other benefits you promise to your staff. This arrangement is typical in franchising, where franchisees are considered independent business owners.