Is Floyds 99 liable for a franchisee's failure to pay taxes?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
e or responsible for the other's debts or obligations, nor shall either party be obligated for any damages to any person or property directly or indirectly arising out of the operation of the other party's business authorized by or conducted pursuant to this Agreement. Neither the Franchisor nor the Franchisee will hold themselves out to be the agent, employer or partner of the other and neither the Franchisor nor the Franchisee has the authority to bind or incur liability on behalf of the other.
- 21.2 Payment of Other Obligations. The Franchisor shall have no liability for the Franchisee'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 the Franchisee, the Franchisee's property, the FLOYD'S 99 Shop or upon the Franchisor in connection with the sales made or business conducted by the Franchisee (except any taxes the Franchisor is required by law to collect from the Franchisee with respect to purchases from the Franchisor). In addition, the Franchisor shall not be liable for any claims arising from labor or employment law violations committed by the Franchisee or its employees.
- 21.3 Indemnification.
Source: Item 22 — CONTRACTS (FDD pages 57–58)
What This Means (2025 FDD)
According to Floyds 99's 2025 Franchise Disclosure Document, Floyds 99 is not liable for a franchisee's failure to pay taxes. The FDD states that Floyds 99 has no liability for the franchisee's obligations to third parties, including government agencies, for any taxes levied upon the franchisee, the franchisee's property, or the Floyds 99 shop. This includes sales, use, service, occupation, excise, gross receipts, income, property, or other taxes related to the franchisee's sales or business operations. The only exception is for taxes that Floyds 99 is legally required to collect from the franchisee related to purchases from Floyds 99.
This provision clarifies the independent business relationship between Floyds 99 and its franchisees. It ensures that franchisees are solely responsible for their own financial obligations, including taxes, and protects Floyds 99 from being held liable for these obligations. This is a common arrangement in franchising, where franchisees operate as independent entities and are responsible for managing their own finances and compliance with applicable laws and regulations.
Furthermore, the franchisee is required to indemnify Floyds 99 against any claims, obligations, or damages arising from the franchisee's failure to comply with applicable laws or regulations. This indemnification clause reinforces the franchisee's responsibility for their own actions and ensures that Floyds 99 is protected from any legal or financial repercussions resulting from the franchisee's non-compliance with tax laws or other regulations.