What is the geographic scope of the tax assessment that a Coffee News franchisee is responsible for?
Coffee_News Franchise · 2025 FDDAnswer from 2025 FDD Document
The Franchisees shall comply with all rules and regulations concerning the endorsement of products pursuant to the 2012 FTC Endorsement Guidelines, as it may be amended from time to time. If the Franchisee is in any way compensated
relating to promote and post about a product, then any post by the Franchisee on that topic must disclose such relationship.
Source: Item 23 — Receipts (FDD pages 36–118)
What This Means (2025 FDD)
The 2025 Coffee News Franchise Disclosure Document states that franchisees are responsible for complying with all laws and regulations applicable to their use of social media. This includes, but is not limited to, laws and regulations concerning endorsements, testimonials, and advertising.
Specifically, Coffee News franchisees must adhere to the 2012 FTC Endorsement Guidelines, as they may be amended, when promoting products on social media. If a franchisee is compensated for promoting a product, they must disclose this relationship in their posts.
Additionally, Coffee News USA, Inc. operates as an S corporation under the United States Internal Revenue Code, meaning its income is taxed at the shareholder level for federal income tax purposes. The FDD mentions that federal and state returns for 2024, 2023, and 2022 are subject to examination by the IRS, generally for three years after filing. However, the FDD does not specify the geographic scope of tax assessments for franchisees, but it does state that franchisees are responsible for complying with all laws and regulations.