Who is responsible for paying the property taxes on the medical equipment for C3 Wellness Spa?
C3_Wellness_Spa Franchise · 2024 FDDAnswer from 2024 FDD Document
- (d) Taxes. Practice will keep the Medical Equipment free and clear of all levies, liens, and encumbrances.
Practice, or Manager as a Practice Expense, will report, pay and discharge when due all license and registration fees, assessments, sales, use and property taxes, gross receipts, taxes arising out of receipts from use or operation of the Medical Equipment, and other taxes, fees and governmental charges similar or dissimilar to the foregoing, together with any penalties or interest, imposed by any state, federal or local government or any agency, or department upon the Medical Equipment or the use, operation, or leasing of the Medical Equipment or otherwise in any manner and whether or not the same will be assessed against or in the name of Manager or Practice.
However, Practice will not be required to pay or discharge any such tax or assessment so long as it will contest, in good faith and by appropriate legal proceedings, the validity of such proceedings in any reasonable manner which will not affect or endanger the title and interest of Manager to the Medical Equipment.
Practice will, however, reimburse Manager for any damages or expenses resulting from such failure to pay or discharge.
In case of failure of Practice to pay fees, assessments, charges and taxes, all as specified in this Agreement, Manager will have the right, but not the obligation, to pay such fees, assessments, charges and taxes, as the case may be.
In that event, Practice will promptly reimburse Manager for such costs in accordance with this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 59–293)
What This Means (2024 FDD)
According to C3 Wellness Spa's 2024 Franchise Disclosure Document, the "Practice" is responsible for paying property taxes on the medical equipment. The "Practice", or the Manager as a Practice Expense, will report, pay, and discharge when due all license and registration fees, assessments, sales, use and property taxes, gross receipts, taxes arising out of receipts from use or operation of the Medical Equipment, and other taxes, fees and governmental charges. These payments include any penalties or interest, imposed by any state, federal or local government or any agency, or department upon the Medical Equipment or the use, operation, or leasing of the Medical Equipment or otherwise in any manner and whether or not the same will be assessed against or in the name of Manager or Practice.
However, the Practice is not required to pay or discharge any tax or assessment as long as it contests, in good faith and by appropriate legal proceedings, the validity of such proceedings in any reasonable manner which will not affect or endanger the title and interest of Manager to the Medical Equipment. If the Practice fails to pay or discharge, the Practice will reimburse the Manager for any damages or expenses resulting from such failure to pay or discharge.
In the event that the Practice fails to pay the fees, assessments, charges, and taxes, the Manager has the right, but not the obligation, to pay these costs. If the Manager pays these costs, the Practice must promptly reimburse the Manager in accordance with the agreement.