Who pays the sales and transfer taxes associated with the sale of Cinnaholic's Assets?

According to Cinnaholic's 2025 Franchise Disclosure Document, the franchisee is responsible for paying taxes related to their operations. Specifically, the franchisee must promptly pay all taxes levied or assessed due to their operation and performance under the Franchise Agreement. This includes, if applicable, state employment tax and state sales tax, including any sales or use tax on equipment purchased or leased. The franchisee is also responsible for all other taxes and expenses of operating the Cinnaholic bakery.

Cinnaholic franchisees must ensure that they do not allow a tax sale or seizure by levy, execution, or similar writ or warrant to occur against the bakery, the franchised site, or any tangible personal property used in connection with operating the bakery. This highlights the importance of franchisees maintaining good financial standing and adhering to all tax obligations to avoid potential legal and financial repercussions.

This clause in the franchise agreement emphasizes the franchisee's responsibility for managing and paying all applicable taxes related to their Cinnaholic bakery. It is a standard practice in franchising for franchisees to bear the responsibility for their own tax obligations, as they are operating as independent business owners. Franchisees should consult with a tax professional to ensure they understand and comply with all relevant tax laws and regulations.