Is a Crown Gold Exchange franchisee required to pay all taxes when due?
Crown_Gold_Exchange Franchise · 2024 FDDAnswer from 2024 FDD Document
If any of the assets are subject to a lien, Crown Gold Franchising may pay a portion of the purchase price directly to the lienholder to pay off such lien.
Crown Gold Franchising may withhold 25% of the purchase price for 90 days to ensure that all of Franchisee's taxes and other liabilities are paid.
Crown Gold Franchising may assign this purchase option to another party.
Source: Item 22 — CONTRACTS (FDD pages 38–39)
What This Means (2024 FDD)
According to Crown Gold Exchange's 2024 Franchise Disclosure Document, while it's not explicitly stated that a franchisee must pay all taxes when due, there is a clause that protects Crown Gold Exchange in the event a franchisee does not pay their taxes. Specifically, if Crown Gold Exchange were to purchase the assets of a Crown Gold Exchange franchise, they may withhold 25% of the purchase price for 90 days to ensure that all of the franchisee's taxes and other liabilities are paid.
This implies that Crown Gold Exchange is concerned about the possibility of franchisees not paying their taxes and is taking steps to protect itself. It also suggests that a franchisee's failure to pay taxes could have negative consequences, such as delaying or reducing the amount they receive if Crown Gold Exchange purchases their assets.
While this excerpt doesn't explicitly mandate timely tax payments, the withholding provision strongly incentivizes franchisees to remain current on all tax obligations. A prospective franchisee should inquire with Crown Gold Exchange about the specific requirements and potential ramifications related to tax compliance to fully understand their obligations.