Is a Brain Balance franchisee responsible for taxes arising from the franchise agreement?
Brain_Balance Franchise · 2025 FDDAnswer from 2025 FDD Document
FRANCHISEE shall pay on a timely basis all of its bills and obligations; federal, state, and local and other expenses; and all taxes of the Franchised Business. FRANCHISEE shall not create or incur any expenses chargeable to COMPANY without COMPANY's prior written approval.
Source: Item 22 — CONTRACTS (FDD pages 70–72)
What This Means (2025 FDD)
According to Brain Balance's 2025 Franchise Disclosure Document, the franchisee is responsible for paying all taxes associated with the operation of the franchised business. This includes federal, state, and local taxes, as well as any other expenses or obligations that arise. The franchisee is expected to handle these payments on a timely basis.
This obligation means that prospective Brain Balance franchisees need to factor in all tax liabilities when assessing the financial viability of the franchise. It is crucial to budget for these expenses and understand the specific tax requirements in the location where they plan to operate their Brain Balance center. Failing to meet these tax obligations can lead to penalties and legal issues, which could negatively impact the business.
Franchisees are also prohibited from creating any expenses that would be chargeable to Brain Balance without prior written approval. This reinforces the franchisee's financial independence and responsibility for managing their own business expenses, including tax obligations. This is a fairly standard arrangement in franchising, where franchisees operate as independent business owners responsible for their own financial matters.