Is Cool Binz obligated to pay any unpaid tax liabilities on behalf of the franchisee?

According to Cool Binz's 2025 Franchise Disclosure Document, franchisees are responsible for paying their own taxes. Specifically, the franchisee is responsible for the prompt payment of all federal, state, and local taxes related to the operation of their Cool Binz business. These taxes include individual and corporate taxes, sales and use taxes, franchise taxes, gross receipts taxes, employee withholding taxes, FICA taxes, personal property, and real estate taxes.

Furthermore, the franchisee agrees to indemnify Cool Binz in the event that Cool Binz is held responsible for these taxes. This means that if Cool Binz is forced to pay any of the franchisee's unpaid taxes, the franchisee must reimburse Cool Binz for those payments. This clause protects Cool Binz from potential liabilities arising from the franchisee's failure to meet their tax obligations.

This arrangement is typical in franchising, where franchisees operate as independent contractors and are responsible for their own financial obligations, including taxes. The franchisor typically does not assume responsibility for the franchisee's debts or tax liabilities, as the franchisee controls the day-to-day operations and financial management of their individual business. Franchisees should ensure they understand their tax obligations and maintain accurate records to avoid potential issues with tax authorities.