What taxes assessed in the franchisee's region is the Coffee News franchisee responsible for paying?
Coffee_News Franchise · 2025 FDDAnswer from 2025 FDD Document
- 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. Franchisee agrees to notify Franchisor in writing within five days of the commencement of any action, suit, or proceeding which, if decided adversely to Franchisee, would materially and adversely affect Franchisee's financial condition and to notify Franchisor within five days of the issuance of any order, writ, injunction, award, or decree of any court, agency or other governmental instrumentality which adversely affects Franchisee's financial condition.
Source: Item 23 — Receipts (FDD pages 36–118)
What This Means (2025 FDD)
According to the 2025 Coffee News Franchise Disclosure Document, franchisees are responsible for paying all taxes, accounts, and indebtedness incurred in the conduct of their business. This includes any tax assessed by any state or other taxing authority in the franchisee's designated region on fee payments to, or other revenue received by, the franchisor from the franchisee.
This means that in addition to typical business taxes like sales tax or income tax, a Coffee News franchisee is also responsible for any taxes specifically levied on the royalty or other fees they pay to Coffee News. This could include state or local taxes on services or franchise fees, depending on the specific regulations in the franchisee's area.
It is important for prospective Coffee News franchisees to consult with a tax advisor to understand the specific tax obligations in their region, including those related to franchise fees and payments to the franchisor. Franchisees must also notify Coffee News in writing within five days of any action, suit, or proceeding that could adversely affect their financial condition, as well as any order or decree from a governmental entity that has a similar effect.