Does the Kidokinetics franchisee's indemnification obligation extend to taxes arising from the operation of the Kidokinetics Business?

According to Kidokinetics's 2024 Franchise Disclosure Document, the franchisee's indemnification obligation does extend to taxes arising from the operation of the Kidokinetics Business. Specifically, the franchisee agrees to promptly pay all federal, state, and local taxes related to their Kidokinetics Business. These taxes include individual and corporate taxes, sales and use taxes, franchise taxes, gross receipts taxes, employee withholding taxes, FICA taxes, personal property, and real estate taxes.

Furthermore, the franchisee is obligated to indemnify Kidokinetics if the franchisor is held responsible for these taxes. This means that if Kidokinetics has to pay any of the franchisee's tax obligations, the franchisee must reimburse Kidokinetics for those payments. This indemnification clause protects Kidokinetics from financial liabilities resulting from the franchisee's failure to pay taxes related to their business operations.

This requirement is a significant responsibility for the franchisee. Failing to pay these taxes or to indemnify Kidokinetics could lead to legal and financial repercussions, potentially including default under the franchise agreement. Therefore, prospective franchisees should ensure they have a solid understanding of their tax obligations and the resources to meet them promptly.