Who is liable for federal income taxes on Boulder Designs' taxable income?

According to Boulder Designs' 2025 Franchise Disclosure Document, Boulder Designs Franchising, LLC, as a single-member limited liability company, does not pay federal corporate income tax on its taxable income. Instead, the company's member is liable for federal income taxes on the company's taxable income.

This means that Boulder Designs is structured in a way that its profits and losses are passed through directly to its member's individual income tax return. This is a common structure for small businesses and franchises, as it avoids the double taxation that can occur with corporations (where the corporation pays taxes on its profits, and then the individual shareholders pay taxes on their dividends).

For a prospective Boulder Designs franchisee, this information is relevant in understanding the financial structure of the franchise company. It confirms that Boulder Designs itself does not pay federal income taxes, which can be a factor in assessing the overall financial health and stability of the franchisor. The FDD also states that no provision for federal income taxes is provided for in the accompanying financial statements.