Does Marble Slab Creamery collect taxes on the initial fee?
Marble_Slab_Creamery Franchise · 2025 FDDAnswer from 2025 FDD Document
- 4.5.2 The amount of all sales taxes, use taxes, personal property taxes and similar taxes, which shall be imposed upon Franchisee or required to be collected or paid by Franchisor (a) on account of Franchisee's Net Sales, or (b) on account of royalties, advertising fund contributions, or any Initial Fee collected by Franchisor from Franchisee (but excluding Franchisor's ordinary income taxes).
Franchisor, in its discretion, may collect the taxes in the same manner as royalties are collected herein and promptly pay the tax collections to the appropriate Governmental Authority; provided, however, that unless Franchisor so elects, it shall be Franchisee's responsibility to pay all sales, use or other taxes now or hereinafter imposed by any Governmental Authorities on royalties, any Initial Fee, or advertising fund contributions.
Source: Item 22 — CONTRACTS (FDD page 101)
What This Means (2025 FDD)
According to Marble Slab Creamery's 2025 Franchise Disclosure Document, the franchisor has the option to collect sales, use, personal property, and similar taxes related to the franchisee's net sales, royalties, advertising fund contributions, or any initial fee. However, Marble Slab Creamery is not obligated to do so.
If Marble Slab Creamery chooses to collect these taxes, it can do so in the same manner as royalties and will promptly remit the tax collections to the appropriate governmental authority. If Marble Slab Creamery does not elect to collect the taxes, it is the franchisee's responsibility to pay all sales, use, or other taxes imposed by governmental authorities on royalties, the initial fee, or advertising fund contributions.
This means a prospective Marble Slab Creamery franchisee needs to be prepared to potentially handle and pay these taxes themselves, or to have Marble Slab Creamery collect and remit them on their behalf. It is important for a franchisee to clarify with Marble Slab Creamery which method will be used to ensure compliance with all applicable tax laws and regulations.