Under the Bonchon OLO Franchisee Onboarding Agreement, what is the Participating Franchisee responsible for regarding taxes, fees, or other tax liability incurred in connection with funding, equipment, and/or packaged products equipment provided by Pepsi-Cola?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
Participating Franchisee will remain responsible for any applicable taxes, fees or other tax liability incurred in connection with Participating Franchisee's receipt of funding and/or Equipment and/or Packaged Products Equipment provided by Pepsi-Cola under this Agreement. In addition, Participating Franchisee will neither assess nor impose upon Pepsi-Cola or the Bottlers any common area maintenance fees, taxes or other charges based on occupation of the space allocated to Equipment and/or Packaged Products Equipment, nor with respect to the ownership or usage thereof. Upon execution of this Agreement and/or upon request by Pepsi-Cola, Participating Franchisee agrees to accurately complete a Form W-9 (or Form W-8 to the extent applicable) and return such form to Pepsi-Cola. Pepsi-Cola has and reserves the right to subject payments due to Participating Franchisee under this Agreement to the extent required by applicable Internal Revenue Service regulations relating to backup federal tax withholding.
Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, under the OLO Franchisee Onboarding Agreement, the Participating Franchisee is responsible for any applicable taxes, fees, or other tax liability incurred in connection with the receipt of funding, equipment, and/or packaged products equipment provided by Pepsi-Cola. This means that if Pepsi-Cola provides funding or equipment to a Bonchon franchisee, the franchisee is responsible for paying any taxes or fees associated with receiving those benefits.
Furthermore, the Bonchon franchisee is prohibited from assessing or imposing any common area maintenance fees, taxes, or other charges on Pepsi-Cola or its bottlers based on their occupation of space allocated to the equipment or the ownership/usage of the equipment. This ensures that Pepsi-Cola and its bottlers are not subject to additional costs from the franchisee related to the placement and operation of their equipment within the Bonchon outlet.
Finally, the Bonchon franchisee agrees to complete a Form W-9 (or Form W-8 if applicable) accurately and return it to Pepsi-Cola upon execution of the agreement or upon request. Pepsi-Cola reserves the right to subject payments due to the franchisee to backup federal tax withholding as required by IRS regulations. This ensures that both parties comply with tax regulations and that Pepsi-Cola can properly report payments made to the franchisee.