What taxes must a Carbones Pizzeria franchisee pay and when?
Carbones_Pizzeria Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee will pay Franchisor monthly, at the same time as it makes its Royalty payment, an "Advertising Fee" of one percent (1%) of monthly Gross Sales.
The Advertising Fee shall not be due on Gross Sales exceeding $2,000,000 in any calendar year.
- e. Advertising Fees not paid by Franchisee as required herein shall bear interest at the rate of one and a half percent (1.5%) per month, provided, however, that in no event shall the rate of interest payable by Franchisee on any unpaid balance under this Agreement exceed the maximum legal rate under applicable law.
Any Royalty payment not remitted on time shall bear interest at the rate of one and a half percent (1.5%) per month, until such time as it is received by Franchisor; provided, however, that if any applicable state law limits the maximum legal interest rate to a lower amount, then in that event the lower interest rate will be applicable.
Source: Item 23 — RECEIPTS (FDD pages 30–116)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, the Carbones Pizzeria franchisee is responsible for paying an Advertising Fee. This fee is 1% of monthly Gross Sales, payable monthly at the same time as the Royalty payment. However, the Advertising Fee is not due on Gross Sales exceeding $2,000,000 in any calendar year. The Royalty payments are due on the 10th day following the end of each month.
If the franchisee fails to pay the Advertising Fees on time, interest will accrue at a rate of 1.5% per month. However, the interest rate will not exceed the maximum legal rate under applicable law. The Royalty payment not remitted on time shall bear interest at the rate of one and a half percent (1.5%) per month, until such time as it is received by Franchisor; provided, however, that if any applicable state law limits the maximum legal interest rate to a lower amount, then in that event the lower interest rate will be applicable.
It is important to note that the FDD does not explicitly list all the taxes a Carbones Pizzeria franchisee is responsible for. It is typical for franchisees to be responsible for paying all applicable federal, state, and local taxes, including sales tax, payroll tax, and income tax. A prospective franchisee should consult with a financial advisor to determine their tax obligations.