Who is responsible for sales, excise, or gross receipts tax on fees paid to Ledgers?
Ledgers Franchise · 2025 FDDAnswer from 2025 FDD Document
If required by the federal government, state or locality in which your Franchised Business is located, the Initial Franchise Fee, royalties, and possibly other goods or services may be subject to sales, excise, gross receipts or similar type tax, which you will pay to us at the same time and in the same manner as you pay these fees to us.
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to Ledgers' 2025 Franchise Disclosure Document, the franchisee is responsible for sales, excise, or gross receipts taxes. Specifically, if the federal government, state, or locality where the Ledgers franchise is located requires it, the initial franchise fee, royalties, and other goods or services may be subject to sales, excise, gross receipts, or similar taxes.
As a franchisee, you are obligated to pay these taxes to Ledgers at the same time and in the same manner as you pay the associated fees. This means that when you submit your initial franchise fee of $15,000 or your ongoing royalty fees, you must also include any applicable sales, excise, or gross receipts taxes.
This arrangement is fairly standard in franchising, as the franchisee typically operates as an independent business owner responsible for complying with all local, state, and federal tax laws. It is important for prospective Ledgers franchisees to factor these potential tax obligations into their financial planning and to consult with a tax advisor to ensure compliance.