According to the Cicis franchise agreement, what does the term 'Taxes' include?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
12. DEBTS AND TAXES
- A. Payment of Taxes and Other Obligations. You will promptly pay when due all Taxes (as defined below), levied or assessed, and all accounts and other indebtedness of every kind incurred by you in connection with your activities under this Agreement. Each payment to be made to use hereunder will be made free and clear and without deduction for any Taxes. "Taxes" means any present or future taxes, levies, imposts, duties or other charges of whatsoever nature, including any interest or penalties thereon, imposed by any government or political subdivision of such government on or relating to the conduct of your activities under this Agreement, the payment of monies, or the exercise of rights granted pursuant to this Agreement, except Taxes imposed on or measured by our net income.
Source: Item 22 — CONTRACTS (FDD pages 64–65)
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, the term "Taxes" is comprehensively defined within the franchise agreement. It encompasses any present or future taxes, levies, imposts, duties, or other charges imposed by any governmental body or political subdivision. These taxes can include interest or penalties related to the franchisee's activities under the agreement.
Specifically, the definition of "Taxes" relates to the franchisee's conduct, the payment of monies, or the exercise of rights granted under the Cicis franchise agreement. However, there is a notable exception: taxes imposed on or measured by Cicis's net income are excluded from this definition. This means that franchisees are responsible for a broad range of taxes associated with their operations, but not for Cicis's corporate income taxes.
This definition has significant implications for prospective Cicis franchisees. It clarifies their financial responsibilities regarding taxes, ensuring they understand what types of taxes they must pay. Franchisees need to be aware of all applicable taxes in their locality and factor these costs into their financial planning. Understanding this definition is crucial for budgeting and maintaining compliance with all applicable tax laws.
Furthermore, the franchise agreement stipulates that all payments made to Cicis must be free and clear of any deductions for taxes. This means the franchisee cannot deduct any taxes from payments owed to Cicis. This provision ensures that Cicis receives the full amount due under the agreement, separate from the franchisee's tax obligations.