Does Dryject recognize a liability on uncertain tax positions as of December 31, 2023?
Dryject Franchise · 2025 FDDAnswer from 2025 FDD Document
Income Tax - The Company is a limited liability company. The limited liability company itself is not a taxpaying entity for purposes of federal and state income taxes. Federal and state income taxes of the member is computed on his total income from all sources; accordingly, no provision for income taxes is made in these statements.
The Company evaluates its uncertain tax positions and accordingly, a loss contingency is recognized when it is probable that a liability has been incurred as of the date of the financial statements and the amount of the loss can be reasonably estimated. The amount recognized is subject to estimate and management judgment with respect to the likely outcome of each uncertain tax position. The amount that is ultimately sustained for an individual uncertain tax position or for all uncertain tax positions in the aggregate could differ from the amount recognized. As of December 31, 2023, the Company recognized no liability on uncertain tax positions.
Source: Item 8 — BUSINESS RELATIONSHIP (FDD pages 68–229)
What This Means (2025 FDD)
According to Dryject's 2025 Franchise Disclosure Document, Dryject Management, LLC is a limited liability company and not a taxpaying entity for federal and state income taxes. The member's income taxes are computed on their total income from all sources, so no income tax provision is included in the financial statements.
Dryject evaluates its uncertain tax positions to determine if a loss contingency should be recognized. A loss contingency is recognized if a liability was incurred as of the financial statement date and the loss amount can be reasonably estimated. The amount recognized is subject to estimation and management judgment regarding the likely outcome of each uncertain tax position.
Ultimately, the amount sustained for uncertain tax positions could differ from the amount recognized. However, as of December 31, 2023, Dryject recognized no liability on uncertain tax positions. This means that, based on their assessment, Dryject did not have any tax positions where a liability was probable and reasonably estimable as of that date.