Who is responsible for all taxes related to the Bft Fund, its activities, and contributions?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
The Fund need not be segregated from but will be accounted for separately from Franchisor's other funds and Franchisor will not use the Fund for its general operating expenses. All taxes of any kind incurred in connection with or related to the Fund, its activities, contributions to the Fund and/or any other Fund aspect, whether imposed on Franchisor, the Fund or any other related party, will be the sole responsibility of the Fund. Franchisor will not be required to audit the Fund, but will provide an annual accounting of the Fund at the written request of Franchisee that is made 120 days after the fiscal year at issue. All interest earned on monies contributed to, or held in, the Fund will be remitted to the Fund and will be subject to the restrictions of the relevant franchise agreements.
Source: Item 23 — RECEIPTS (FDD pages 79–265)
What This Means (2025 FDD)
According to Bft's 2025 Franchise Disclosure Document, the Fund is solely responsible for all taxes related to the Bft Fund, its activities, and contributions. This includes any taxes incurred in connection with or related to the Fund, its activities, contributions to the Fund, and any other aspect of the Fund. This responsibility applies whether the taxes are imposed on Bft, the Fund, or any other related party.
This means that as a Bft franchisee, your contributions to the marketing fund will not be subject to additional tax liabilities for Bft itself. The marketing fund will handle its own tax obligations separately. Bft will provide an annual accounting of the Fund at the written request of the franchisee that is made 120 days after the fiscal year at issue.
This arrangement is fairly typical in franchising, where marketing funds are often established as separate entities to manage advertising and promotional activities. By making the Fund responsible for its own taxes, Bft aims to maintain clear financial separation and avoid potential tax implications for the franchisor's general operations. Franchisees should be aware that while Bft will provide an annual accounting of the Fund if requested, Bft is not required to audit the Fund.