Is Hydrodog liable for any taxes levied upon the franchisee or the Hydrodog Business?
Hydrodog Franchise · 2025 FDDAnswer from 2025 FDD Document
- 18.3 Taxes. We will have no liability for any sales, use, alcohol surcharge, service, occupation, excise, gross receipts, income, payroll, property or other taxes, whether levied upon you or your HydroDog Business, in connection with the business you conduct (except any taxes we are required by law to collect from you with respect to purchases from us). Payment of all such taxes is your responsibility.
- 18.4 Indemnification. You agree to indemnify, defend and hold harmless us, our affiliates, our parents, and our and our affiliates' and parents' respective shareholders, directors, officers, employees, agents, successors and assignees (the "Indemnified Party(ies)") against and to reimburse any one or more of the Indemnified Parties for all claims, obligations and damages described in this Section, any and all taxes described in this Agreement and any and all claims and liabilities directly or indirectly arising out of your HydroDog Business's operation (even if our negligence is alleged, but not proven) or your breach of this Agreement. For purposes of this indemnification, "claims" includes all obligations, damages (actual, consequential or otherwise) and costs reasonably incurred in the defense of any claim against any of the Indemnified Parties, including, without limitation, reasonable accountants', arbitrators', attorneys', paralegals' and expert witness fees, costs of investigation and proof of facts, court costs, other expenses of litigation, arbitration or alternative dispute resolution and travel and living expenses. We have the right to defend any such claim against us. This indemnity will continue in full force and effect subsequent to and notwithstanding the expiration or termination of this Agreement. Under no circumstances will we or any other Indemnified Party be required to seek recovery from any insurer or other third party, or otherwise to mitigate our, their or your losses and expenses, in order to maintain and recover fully a claim against you. You agree that a failure to pursue such recovery or mitigate a loss will in no way reduce or alter the amounts we or another Indemnified Party may recover from you.
Source: Item 23 — RECEIPTS (FDD pages 43–166)
What This Means (2025 FDD)
According to Hydrodog's 2025 Franchise Disclosure Document, Hydrodog is not liable for any taxes levied upon the franchisee or their Hydrodog business. The franchisee is solely responsible for the payment of all taxes, including sales, use, service, occupation, excise, gross receipts, income, payroll, and property taxes, related to the operation of their Hydrodog business. The only exception is for taxes that Hydrodog is legally required to collect from the franchisee related to purchases from Hydrodog.
Furthermore, the franchisee agrees to indemnify, defend, and hold harmless Hydrodog and its affiliates from any claims, obligations, damages, and taxes arising from the operation of the Hydrodog business or any breach of the franchise agreement. This indemnification covers all costs incurred in defending against any claims, including legal fees and expenses. This means that if Hydrodog incurs any expenses or liabilities due to the franchisee's tax obligations or business operations, the franchisee is responsible for reimbursing Hydrodog.
This arrangement is typical in franchising, where franchisees are considered independent contractors and are responsible for their own financial obligations, including taxes. The franchisee's responsibility for taxes and indemnification of Hydrodog underscores the importance of franchisees maintaining accurate financial records and complying with all applicable tax laws and regulations. Prospective franchisees should consult with a tax professional to understand their tax obligations and ensure compliance.