Initial franchise fee accounting

Q. Is initial franchise fee accounting difficult?

No, initial franchise fee accounting is really quite simple. The initial franchise fee, however, is not an immediate tax write-off. The initial fee must be posted in the company balance sheet to an “other-asset” account usually called something like “franchise fee.” The fee is then amortized to expense over the useful life of the franchise. This may be the contract term, but it is best to consult a tax advisor regarding the amortization period. The IRS frequently changes rules regarding this.Some people who were considering becoming franchise business owners have opted instead to become We Simplify the Internet business consultants.

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