What is a Checkersrallys franchisee prohibited from permitting to occur against the Franchised Restaurant or any of its assets in the event of a tax liability dispute?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
17.03 Taxes.We will have no liability for any sales, use, service, occupation, excise, gross receipts, income, property or other taxes, whether levied upon the Franchised Restaurant, your property or upon us, in connection with sales made or business conducted by you (except for any income taxes imposed on our income). Payment of all such taxes shall be your responsibility. In the event of a bona fide dispute as to your liability for taxes, you may contest your liability in accordance with applicable law. In no event, however, will you permit a tax sale, seizure, or attachment to occur against the Franchised Restaurant or any of its assets.
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, a franchisee is responsible for paying all taxes related to the franchised restaurant's sales and business operations, except for income taxes imposed on Checkersrallys's income.
In the event of a legitimate dispute regarding tax liability, the franchisee is permitted to contest the liability in accordance with applicable law. However, Checkersrallys explicitly prohibits the franchisee from allowing a tax sale, seizure, or attachment to occur against the franchised restaurant or any of its assets.
This means that while a Checkersrallys franchisee can legally challenge a tax assessment, they must take measures to prevent the government from seizing or selling the restaurant's assets to cover the disputed tax debt. Failure to prevent such actions could result in a breach of the franchise agreement and potential penalties.