What is the condition that triggers the Tax Indemnity obligation for a Christies International Real Estate franchisee?
Christies_International_Real_Estate Franchise · 2025 FDDAnswer from 2025 FDD Document
| Fee (Note 1) | Amount (Note 2) | Due Date | Remarks |
|---|---|---|---|
| Royalty Fee | 3% to 6% of Gross Revenues, depending on whether your Protected Territory is exclusive and other factors | Monthly | Paid via Electronic Funds Transfer (EFT). You and we will negotiate your Royalty Fee, which will vary based on whether your Protected Territory is exclusive and other factors. It will range between 3% and 6%. |
| Advertising Fund Fee | Currently not collected | If collected, monthly with the Royalty Fee | We do not currently have an Advertising Fund. If implemented, the Advertising Fund Fee will not exceed 3% of Gross Revenues. |
| Additional Training, Training, Designated Programming | Currently, not collected, but the expected range would be between $200 to $3,000, per person per day | Upon demand | (Note 3) |
| Additional Training | Currently, $500 per attendee per day | Upon demand | |
| Annual Conference Fee | Currently, the expected range would be $1,500 to $3,500 per person | Before attending the Annual Conference | |
| Transfer Fee | $5,000 | Before you complete the transfer | Subject to state law, you pay the transfer fee when the License Agreement, the Business, or a material interest in you is transferred. You do not pay the transfer fee if the transferee is an entity controlled by you. |
| Renewal Fee | $1,000 | Upon notice of intent to renew | |
| Audit Fee | Cost of Audit | When incurred | Payable if audit discloses an under reporting of Gross Revenues or underpayment to us by 5% or more. |
| Insurance | Actual amount incurred | Upon demand | If you fail to purchase the insurance policies required under the License Agreement, we may purchase them on your behalf, and you will reimburse us. |
| Fee | Amount | Due Date | Remarks |
| (Note | (Note | ||
| 1) | 2) | ||
| Liquidated Damages | An amount equal to the average of the Royalty Fees payable by you over the previous 12 months (or the annualized amount of Royalty Fees if your Business has not been open for at least 12 months) and multiplied by the lesser of 24 or the number of months remaining on the term of the License Agreement | When the License Agreement is terminated prior to the end of the initial term | This is not a penalty but is an attempt to calculate of our damages for lost future revenue resulting from your breach or termination of the License Agreement. |
| Interest | Lessor of 1.5% per month or the maximum permitted by law | Owed on past due amounts | |
| Tax indemnity | Actual amount incurred | Upon demand | If required by the federal, state or locality in which your Business is located. Including sales, excise or gross receipts tax or similar type tax on the initial fee, royalty, and other fees and costs. |
Source: Item 6 — OTHER FEES (FDD pages 14–17)
What This Means (2025 FDD)
According to Christies International Real Estate's 2025 Franchise Disclosure Document, a franchisee is obligated to cover the tax indemnity if required by the federal, state, or locality where their business is located. This includes taxes such as sales, excise, or gross receipts tax, or similar taxes on the initial fee, royalty, and other fees and costs. The actual amount incurred for the tax indemnity is due upon demand.
In practical terms, this means that a Christies International Real Estate franchisee may be responsible for paying various taxes associated with their franchise operations, depending on the specific tax laws of their business location. These taxes could apply to the initial franchise fee, ongoing royalty payments, and other fees or costs outlined in the franchise agreement. The franchisee will need to budget for these potential tax liabilities and ensure timely payment upon demand to avoid any penalties or legal issues.
Franchisees should consult with a tax professional to understand the specific tax obligations in their area and to ensure compliance with all applicable tax laws. This will help them accurately calculate and manage their tax liabilities related to the Christies International Real Estate franchise. It is important to note that the tax indemnity is in addition to other fees and costs associated with operating the franchise, as detailed in Item 6 of the FDD.