Is Buns On Fire liable for debts incurred by the Franchised Business while managing it?
Buns_On_Fire Franchise · 2025 FDDAnswer from 2025 FDD Document
13.2 Franchisee Has Full Responsibility
Franchisee recognizes that Franchisor has entered into this Agreement in reliance upon and in recognition of the fact that Franchisee will have full responsibility for the management and operation of the business and that the amount of profit or loss resulting from the operation of the business will be directly and solely attributable to the performance of Franchisee.
13.4 Identification of Independent Ownership
In all public records and prominently displayed at the Franchised Business and in Franchisee's relationship with third parties, including but not limited to, employees and vendors, as well as on letterheads and business forms, Franchisee shall indicate clearly the independent ownership of the Franchised Business, and that the operations of same are separate and distinct from the operation of Franchisor's business. Franchisor shall have the absolute right to approve and/or supply any sign displays containing the foregoing.
13.5 Taxes
The Franchisor shall have no liability for any sales, use, excise, gross receipts, property or other taxes, whether levied upon Franchisee, the Franchised Business or its assets, or upon Franchisor in connection with sales made, services performed or business conducted by Franchisee, except for any taxes Franchisor is required by law to collect from Franchisee with respect to purchases from Franchisor or for Franchisor's own income tax liability.
Source: Item 23 — RECEIPTS (FDD pages 49–200)
What This Means (2025 FDD)
According to the 2025 Buns On Fire Franchise Disclosure Document, franchisees are fully responsible for the management and operation of their business. The amount of profit or loss is directly and solely attributable to the franchisee's performance. This means Buns On Fire franchisees operate independently.
Buns On Fire is not liable for various taxes related to the franchisee's business. Specifically, the franchise agreement states that Buns On Fire has no liability for any sales, use, excise, gross receipts, property, or other taxes levied upon the franchisee, the franchised business, or its assets. This extends to taxes related to sales made, services performed, or business conducted by the franchisee. The only exception is for taxes that Buns On Fire is legally required to collect from the franchisee for purchases from Buns On Fire or for Buns On Fire's own income tax liability.
In all public records, at the franchised business, and in relationships with third parties, including employees and vendors, franchisees must clearly indicate the independent ownership of their Buns On Fire franchise. This includes letterheads and business forms. This reinforces that the operations of the franchise are separate and distinct from Buns On Fire's corporate business. Buns On Fire retains the right to approve and/or supply any sign displays containing this information, ensuring consistent messaging about independent ownership.