Health Mart's Two Franchise Offerings:

1. Basic - $325 Monthly Fee: Includes access to all Health Mart tools and programs including FrontEdge Pricing, Planograms, and access to Health Mart private label merchandise. There will be no front-end services SPAR Merchandiser, Monthly Circular or Auto-Ship.

2. Basic Plus - $350 Monthly Fee: Includes access to all Health Mart tools and programs including receipt of Health Mart monthly circular featuring over the counter (OTC) private label merchandise, front-end merchandising support services and Auto-ship program for OTC private label merchandise.

Why the Franchise Fee is Taxable:

Franchise fees are intangibles and are generally exempt from sales tax. However, when services and tangible personal property are bundled with the fees, the fees lose their identity as an intangible not subject to sales tax.  The fees may be subject to sales tax depending on the inclusion of taxable services and taxable tangible personal property.  In Health Mart’s case, the franchise fees include the provision of tangible property and online information services.  Tangible property is taxable in all taxing jurisdictions.  Additionally, information services are taxable in a number of states.  Because of this, it is our position that the Health Mart franchise fees should remain taxable.

NOTE: Email your questions regarding franchise fees or invoices to healthmartoperations@mckesson.com.