When purchasing assets for a HydroDog franchise, who is responsible for paying all sales and transfer taxes?
Hydrodog Franchise · 2025 FDDAnswer from 2025 FDD Document
At the closing, you agree to deliver instruments transferring to us:
- (i) good and merchantable title to the assets purchased, free and clear of all liens and encumbrances (other than liens and security interests acceptable to us), with all sales and other transfer taxes paid by you; and
- (ii) All licenses and permits of your HydroDog Business which may be assigned or transferred; and
- (iii) The leasehold interest and improvements in the HydroDog Vehicle.
If you cannot deliver clear title to all of the purchased assets, or if there are other unresolved issues, the closing of the sale will be accomplished through an escrow. You and your owners further agree to execute general releases, in form satisfactory to us, of any and all claims against us and our shareholders, officers, directors, employees, agents, successors and assigns.
Source: Item 23 — RECEIPTS (FDD pages 43–166)
What This Means (2025 FDD)
According to Hydrodog's 2025 Franchise Disclosure Document, when a franchisee purchases assets, they are responsible for paying all sales and transfer taxes. Specifically, the franchisee must deliver instruments transferring good title to the assets, free of liens, with all sales and other transfer taxes paid by them. This obligation is part of the closing requirements for the purchase.
This means that as a prospective Hydrodog franchisee, you should factor in these tax liabilities when budgeting for the purchase of assets. These taxes can vary depending on the location and nature of the assets being transferred, so it's important to consult with a tax professional to understand the potential costs involved. Failing to pay these taxes could prevent the transfer of assets and delay the opening of your Hydrodog business.
Furthermore, if the franchisee cannot deliver clear title to all purchased assets, the closing of the sale will be managed through an escrow account. The franchisee is also responsible for executing general releases of any claims against Hydrodog and its affiliates. This ensures that Hydrodog is protected from any future liabilities related to the transferred assets.