How are federal income taxes handled for Floyds 99, considering it's treated as a partnership?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
- 10.2 Payment of Third-Party Obligations. Franchisor shall have no liability for Developer's obligations to pay any third parties, including without limitation, banks, other lenders, government agencies, any product vendors, or any sales, use, service, occupation, excise, gross receipts, income, property or other tax levied upon Developer, Developer's property, the FLOYD'S 99 Shop(s) developed
under this Agreement or upon Franchisor in connection with the sales made or business conducted by Developer (except any taxes Franchisor is required by law to collect from Developer with respect to purchases from Franchisor).
Source: Item 23 — RECEIPT (FDD pages 58–229)
What This Means (2025 FDD)
Based on the 2025 Floyds 99 Franchise Disclosure Document, franchisees are considered independent businesspersons and are responsible for their own taxes. Floyds 99 Franchising, LLC is not liable for the franchisee's obligations to pay any taxes.
Specifically, the franchisee is responsible for sales, use, service, occupation, excise, gross receipts, income, property, or other taxes levied upon the franchisee, the franchisee's property, or the Floyd's 99 shop. This also includes taxes levied upon Floyds 99 Franchising, LLC in connection with the sales made or business conducted by the franchisee, except for any taxes that Floyds 99 is legally required to collect from the franchisee.
This arrangement is typical in franchising, where franchisees operate as independent entities. Prospective franchisees should consult with a tax professional to understand their tax obligations and how the partnership structure affects their individual tax situation.