Does the Floyds 99 Franchisor have liability for the Developer's tax obligations?
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)
According to the 2025 Floyds 99 Franchise Disclosure Document, Floyds 99 Franchising, LLC is not liable for the Developer's tax obligations. The agreement explicitly states that Floyds 99 has no liability for the Developer's obligations to pay any third parties, including government agencies, lenders, or vendors. This extends to any sales, use, service, occupation, excise, gross receipts, income, property, or other tax levied upon the Developer, the Developer's property, or the Floyds 99 shop.
This provision clarifies that the Developer is solely responsible for all tax obligations related to their business. The only exception is for taxes that Floyds 99 is legally required to collect from the Developer concerning purchases from Floyds 99.
This aspect of the agreement is a standard practice in franchising, where franchisees or developers operate as independent business owners and are responsible for their own financial and legal obligations, including taxes. A prospective Floyds 99 developer should understand this division of responsibility and ensure they are prepared to manage all tax-related matters for their business.