What is the Coffee News franchisee's obligation regarding payment of taxes and debts?
Coffee_News Franchise · 2025 FDDAnswer from 2025 FDD Document
onferencing, a newsletter, business and marketing ideas, form and display rack samples, and other networking concepts as they develop in the future.
8. OBLIGATIONS OF FRANCHISEE.
In addition to the other obligations in this Agreement, Franchisee has the following obligations:
- 8.1 Best Efforts. Franchisee shall use its best efforts to promote the Periodical by obtaining advertisers for the Periodical in the Franchisee's region. Franchisee shall distribute the Periodical to as many restaurants, hotels, coffee shops and other outlets directed by Franchisor as possible and to otherwise distribute the Periodical in such other ways as Franchisor may deem to be in the best interest of both parties.
- 8.2 Payment of Debts: Adverse Action. Franchisee shall pay promptly when due all taxes, accounts, and indebtedness of any kind incurred by Franchisee in the conduct of its business unless being contested actively in good faith. Franchisee shall pay any tax assessed by any State or other taxing authority in Franchisee's designated region on fee payments to or other revenue received by Franchisor from Franchisee.
Source: Item 23 — Receipts (FDD pages 36–118)
What This Means (2025 FDD)
According to the 2025 Coffee News Franchise Disclosure Document, franchisees are required to pay all taxes, accounts, and indebtedness incurred in the operation of their Coffee News business promptly when due. The only exception to this rule is if the franchisee is actively contesting the debt in good faith.
Additionally, Coffee News franchisees must pay any tax assessed by a state or other taxing authority on fee payments or other revenue received by the franchisor from the franchisee. This means that if a state imposes a tax on the royalty fees that Coffee News receives, the franchisee is responsible for paying that tax.
Furthermore, the franchisee is obligated to notify Coffee News in writing within five days of the commencement of any legal action that could materially and adversely affect the franchisee's financial condition. The franchisee must also notify Coffee News within five days of the issuance of any order, writ, injunction, award, or decree from a court, agency, or other governmental body that adversely affects the franchisee's financial condition. This ensures that Coffee News is kept informed of any potential financial difficulties the franchisee may be facing.