What fees for a Ledgers franchise might be subject to sales or gross receipts tax?
Ledgers Franchise · 2025 FDDAnswer from 2025 FDD Document
| Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Royalty Fee (Notes 1 and 2) | The Royalty Fee is 10% of Gross Revenues | See Note 1 for a definition of Gross Revenues. | |
| Advertising Fee | 3% of the previous month’s Gross Revenues | Monthly | You agree to pay this fee to us to support our advertising program. |
| Credit Card Processing Fee | The actual amount charged by third party credit card processor The actual amount charged by third party credit card processor | As incurred | |
| Central Processing Services Fee | Then current rate based on the service requested (up to 40% of our-then current Recommended Fee (Note 3) | As incurred | You agree to pay this fee to us for any central processing services we provide to your clients on your behalf. |
| Insufficient | $50 per transaction $50 per transaction | As incurred | |
| Funds Fee | |||
| Audit Fee | Cost of Audit plus $50 per month Late Fee on any late payment | Immediately upon conclusion of audit | |
| Transfer Fee | $5,000 for a transfer of the franchise or a majority interest in it. | Due before transferring | We must approve the transfer. |
| Interest and | Actual amount | As incurred | |
| Penalties | incurred Actual amount incurred | ||
| Client Refunds | The amount of any fee we refund to a client | As invoiced | |
| Fee | Amount | Due Date | Remarks |
| Assistance Fee in the event of death or incapacity | Our reasonable expenses plus 10% of Gross Revenues for the period in which we operate or assist in the operation of the Franchised Business. | At time of expense | We are entitled to this fee if we must operate your franchise due to your death or incapacity. |
| On-Site Training | $500 per half day per person plus travel expenses | As incurred | We are entitled to this fee if we provide on-site training at your request at your Franchised Business. |
| Sales, Excise, or Gross Receipts tax | Actual amount of tax paid | At time of payment of fees to us which are subject to any tax | If required by the state or locality in which your franchise is located, the initial franchise fee, advertising fee, and possibly other fees will be subject to sales or gross receipts tax. |
Source: Item 6 — OTHER FEES (FDD pages 17–20)
What This Means (2025 FDD)
According to Ledgers's 2025 Franchise Disclosure Document, the initial franchise fee, advertising fee, and possibly other fees may be subject to sales or gross receipts tax. The actual amount of tax paid is the responsibility of the franchisee and is due at the time of payment of fees to Ledgers. This is contingent upon the requirements of the state or locality where the franchise is located.
This means that a prospective Ledgers franchisee needs to be aware that the listed fees in Item 6 may not be the final cost. Depending on the location of the franchise, sales, excise, or gross receipts taxes could increase the initial investment and ongoing fees. It is important to budget for these potential additional costs.
Franchisees should consult with a tax advisor in their specific location to determine which fees are subject to these taxes. Understanding these tax obligations is crucial for accurate financial planning and ensuring compliance with local regulations. This is a fairly standard practice in franchising, as tax laws vary significantly by jurisdiction, and the franchisee is typically responsible for these taxes.