What are the obligations of a Crave franchisee regarding debts and taxes, as outlined in Article 13?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 23: RECEIPTS]
ARTICLE 13 DEBTS AND TAXES
13.1 Taxes
You shall promptly pay when due all Taxes (as defined below), levied or assessed, and all accounts and other indebtedness of every kind incurred by you in the conduct of the Franchised Business under this Agreement. Without limiting the provisions of Article 15, you shall be solely liable for the payment of all Taxes and shall indemnify us for the full amount of all such Taxes and for any liability (including penalties, interest and expenses) arising from or concerning the payment of Taxes, whether such Taxes were correctly or legally asserted or not. You shall submit a copy of all tax filings sent to federal, state and local tax authorities to us within ten (10) business days after such filing has been made with the appropriate taxing authority.
The term "Taxes" means any present or future taxes, levies, imposts, duties or other charges of whatever nature, including any interest or penalties thereon, imposed by any government or political subdivision of such government on or relating to the operation of the Franchised Business, the payment of monies, taxes imposed on the Royalty Fees paid to us, or the exercise of rights granted pursuant to this Agreement, whether imposed upon you or us.
13.2 Payments to Us
Each payment to be made to us hereunder shall be made free and clear and without deduction for any Taxes.
13.3 Tax Disputes
In the event of any bona fide dispute as to your liability for taxes assessed or other indebtedness, you may contest the validity or the amount of the tax or indebtedness in accordance with the procedures of the taxing authority or applicable law. However, in no event shall you permit a tax sale or seizure by levy of execution or similar writ or warrant or attachment by a creditor to occur against the premises of the Franchised Business or any improvements thereon.
Source: Item 23 — RECEIPTS (FDD pages 63–253)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, Article 13 outlines the franchisee's responsibilities regarding debts and taxes. The franchisee is responsible for promptly paying all taxes, levies, and debts incurred while operating the franchised business. This includes any taxes imposed by any government or political subdivision related to the business's operation, payments made, or rights exercised under the Franchise Agreement. The franchisee is also responsible for any interest or penalties on these taxes.
Crave franchisees must indemnify Crave for the full amount of all taxes and any liabilities, including penalties, interest, and expenses, arising from the payment of taxes, regardless of whether the taxes were correctly or legally asserted. Franchisees are required to submit copies of all tax filings sent to federal, state, and local tax authorities to Crave within ten business days after filing.
Furthermore, all payments made to Crave by the franchisee must be free and clear, without any deductions for taxes. If a franchisee has a legitimate dispute regarding their tax liability or other indebtedness, they may contest it through the appropriate procedures. However, the franchisee cannot allow a tax sale or seizure of the franchised business premises or any improvements on it due to a levy of execution, writ, warrant, or attachment by a creditor.