When is the Sales, Excise, or Gross Receipts tax due for a Ledgers franchise?
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 Sales, Excise, or Gross Receipts tax is due at the time of payment of fees to Ledgers which are subject to any tax. This means that if the state or locality where the Ledgers franchise is located requires sales or gross receipts tax on the initial franchise fee, advertising fee, or other fees, the franchisee must pay the tax at the same time they pay those fees to Ledgers.
For a prospective Ledgers franchisee, this implies that the initial investment and ongoing costs could be higher than the stated amounts if these taxes apply in their area. It is important to budget for these potential tax obligations when evaluating the financial feasibility of the franchise. The franchisee should consult with a tax advisor to determine which taxes apply to their specific location and how to properly calculate and remit them.
This arrangement is fairly standard in franchising, where franchisees are generally responsible for all applicable taxes related to their business operations. The FDD clearly states that the franchisee is responsible for paying these taxes to Ledgers when the underlying fees are due, which then presumably remits them to the appropriate taxing authorities. Franchisees should ensure they understand their tax obligations to avoid penalties or legal issues.