When are Sales/Use Taxes payable for a Punch King Fitness franchise?
Punch_King_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
| Name of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| violation and/or non compliance. | |||
| Cost of Enforcement | Cost including attorney fees | Upon demand | If we prevail, you must reimburse us for all costs to enforce obligations under the Franchise Agreement. |
| Indemnification | Cost including attorney fees | Upon demand | You must defend suits at your cost and hold us harmless against suits involving damages resulting from your operation of the Franchised Business. |
| Sales/Use Taxes6 | The amount of federal, state, and local taxes levied on the Royalty Fees and National Advertising Contributions paid to Franchisor and other monies paid to Franchisor | Payable with your royalty fee or National Advertising Contribution payments | You must pay any state or local sales or use tax that may be assessed on fees paid to us. |
Source: Item 6 — OTHER FEES (FDD pages 10–16)
What This Means (2024 FDD)
According to Punch King Fitness's 2024 Franchise Disclosure Document, sales/use taxes are payable with your royalty fee or National Advertising Contribution payments. These taxes are levied on the Royalty Fees and National Advertising Contributions paid to the franchisor, as well as other monies paid to the franchisor.
Franchisees are responsible for paying any state or local sales or use tax that may be assessed on fees paid to Punch King Fitness. This means that in addition to the standard fees like the royalty fee (5% of Gross Revenues or $1,000, whichever is greater, each month after the first 6 months) and the National Advertising Contributions (2% of Gross Revenues), franchisees must also budget for and remit the applicable sales/use taxes.
It is important for prospective franchisees to understand the sales and use tax laws in their specific state and locality to accurately forecast their financial obligations. Failure to pay these taxes on time could result in penalties or other enforcement actions from taxing authorities, as well as potential action from Punch King Fitness itself.