What happens if a Byrider franchisee fails to pay taxes when due?

According to Byrider's 2025 Franchise Disclosure Document, if a franchisee fails to pay federal or state income, service, sales, or other taxes when due on the operation of their Byrider business, Byrider has the right to terminate the Franchise Agreement. However, this is only applicable if the franchisee is not in good faith contesting their liability for these taxes.

This means that a Byrider franchisee must ensure all taxes related to their business are paid on time unless they have a legitimate dispute and are actively contesting the tax liability in good faith. Failure to do so can result in the termination of their franchise agreement, which would mean losing the right to operate the Byrider business and potentially losing their initial investment.

Most franchise agreements contain clauses requiring franchisees to comply with all applicable laws and regulations, including tax laws. Franchisors want to protect their brand's reputation and avoid legal issues, so they typically include provisions that allow them to terminate the agreement if a franchisee fails to meet these obligations. This clause in the Byrider agreement is a standard measure to ensure franchisees operate legally and ethically.