Who we work with
We work with franchise owners whose businesses bring in $1 million or more in annual revenue: restaurants and food service, fitness, home services, retail, auto services, hotels, and other franchised brands, from single-unit owners ready to grow to multi-unit and multi-brand operators.
Franchise owners at this level are juggling several entities, locations, and payrolls, with royalties and franchisor reporting on top. A plan that covers the whole group keeps each opening from becoming a tax surprise.
The tax and financial challenges franchise owners face
Franchising adds its own costs and reporting on top of running the business.
Franchise fees and startup costs
The initial franchise fee is generally deducted over 15 years, while royalties and ad fund fees are deducted as you pay them. Pre-opening costs have their own rules.
Build-outs and equipment
Interior build-outs, kitchen and fitness equipment, signage, and furniture each have different depreciation rules. Sorting them correctly can move large deductions into the opening year.
Entity structure across units
One LLC per location, a management company, and a separate real estate entity can protect you and simplify a future sale, but each adds filings.
Payroll and tips
Large hourly teams, turnover, and tipped employees in restaurants make payroll one of your biggest costs. Some restaurant owners can claim a credit for employer Social Security and Medicare tax on tips.
Sales tax at every location
Each location can have its own local rate and filing. Getting it wrong is costly, and it adds up fast across units.
Reporting to the franchisor
Royalty reports, unit-level financials, and franchisor audits need clean books that tie out every month.
Strategies that often fit franchise owners
Every business is different, and we only recommend what fits your numbers and your goals. These are strategies that often come up for owners like you.
- Section 179 and 100% bonus depreciationEquipment, furniture, and qualifying interior build-outs can often be deducted in the year a location opens.
- Cost segregationIf you own the building, a study can move a big piece of its cost into faster deductions.
- Own the building, rent it to your unitsHolding real estate in its own LLC protects it and gives you a separate asset when you sell the units.
- The S corp electionStop paying 15.3% self-employment tax on all your profit.
- S corp reasonable compensationA salary that holds up to IRS scrutiny, with the rest as distributions.
- The 20% QBI deductionMost franchise businesses aren’t specified service fields, and your payroll can help you keep this deduction at higher incomes.
- The Oklahoma PTE electionOklahoma owners with S corps or partnerships can turn state income tax into a federal business deduction.
Advanced strategies for higher-income owners
Multi-unit owners with growing profit, real estate, or an exit in mind often need more than the basics.
- Selling your unitsAsset vs. stock sale and how the price is split among equipment, goodwill, and a non-compete change the tax on the same deal.
- C corp vs. S corpIf you keep profit in the business to open more units, the 21% corporate rate is worth testing.
- The 1031 exchangeSell a building you own and defer the gain by buying replacement real estate.
- Avoiding the 3.8% net investment income taxRent your units pay to your own building LLC can stay out of the 3.8% tax when the rules are met.
- A cash balance planProfitable owners can deduct far more for retirement than a 401(k) alone allows.
- Lifetime gifts and SLATsMove future growth out of your estate under the $15 million per person exemption.
Everything under one roof
One monthly Tax Plan covers your business and your personal taxes. Plans start at $475 per month and are priced by complexity, and you’ll know your price before you commit.
- Year-round tax planningWe project your tax bill all year and plan openings, equipment, and owner pay before deadlines pass.
- Business and personal returnsReturns for each entity and your personal return, included in your plan.
- BookkeepingMonthly books by location that tie out to your royalty reports and franchisor reporting.
- Payroll for every locationManagers, hourly staff, and tipped employees, with payroll tax filings handled.
- Sales taxTracking and filing for each location and local rate.
- 1099sPrepared and filed for contractors and vendors who need them.
- Quarterly estimated paymentsFederal and state amounts calculated for you, with personal and business taxes shown separately.
- IRS audit protection and representationIf a notice or audit comes, we represent you before the IRS and handle it with you.
- CFO-style reportingClear reports comparing locations on sales, labor, profit, and cash, so you know which units to grow.
An illustrative example: the first-year deductions for a new location
Picture a multi-unit owner, taxed as an S corp, who opens a new location in leased space in January 2026. The owner pays a $45,000 initial franchise fee, spends $500,000 on the interior build-out, and buys $250,000 of equipment and furniture. The owner is in the 37% federal bracket.
For illustration purposes. Tax law may change, which may change these calculations slightly.
| Regular depreciation | 100% bonus depreciation | |
|---|---|---|
| Interior build-out (qualified improvement property, 15-year) | $16,667 | $500,000 |
| Equipment and furniture (7-year) | $35,725 | $250,000 |
| Initial franchise fee (15 years) | $3,000 | $3,000 |
| Year-one deductions | $55,392 | $753,000 |
Bonus depreciation adds about $697,608 of deductions in the opening year. If the owner can use them at 37%, that’s about $258,115 less federal income tax this year. The franchise fee is deducted over 15 years either way. The Oklahoma effect depends on whether Oklahoma follows federal bonus depreciation for the year, which we confirm before counting on it.
Only interior improvements qualify as qualified improvement property; work that enlarges the building or affects the structure, elevators, or escalators doesn’t. This is mostly a timing benefit, and losses can be limited for owners with large deductions, so we size the write-off to your whole picture.
Illustrative example. The owner, location, and figures above are hypothetical, used to explain how the strategy works. They are not a client and not a promise of results. The example assumes property acquired after January 19, 2025, the half-year convention and full-year figures for regular depreciation and amortization, and that the owner can use the full deduction in the 37% bracket. This page is educational and is not tax advice for your situation.
Questions franchise owners ask us
How do I deduct my franchise fee?
The initial franchise fee is generally treated as an intangible and deducted evenly over 15 years, starting the month the business begins. Ongoing royalties and advertising fund fees are deducted as you pay them. For a first location, some pre-opening startup costs may be deducted right away, with the rest spread over 15 years.
Should each location be its own LLC?
Often, yes. Separate LLCs can keep one location’s problems from reaching the others and make it easier to sell a unit. They also add filings and bank accounts. Many owners use a management company to run payroll and shared costs. We help you pick the structure that fits your group.
Can I write off the build-out of a leased space?
Often, yes. Interior improvements to a nonresidential building, including a tenant’s build-out, are generally qualified improvement property with a 15-year life that qualifies for bonus depreciation. Exterior work, enlargements, and structural work don’t qualify, so we review the build-out costs line by line.
Is there a tax credit for tips my employees receive?
Restaurant and some other owners can claim a federal credit for part of the employer Social Security and Medicare tax paid on employee tips above the minimum wage. We check whether your business qualifies and claim it if it does.
Do you work with franchise owners outside Oklahoma?
Yes. We’re based in Norman and fully virtual, and we work with franchise owners in Oklahoma and beyond, including owners with locations in several states.
Free strategy finder
Find the tax strategies that fit you.
Answer six quick questions and see which of our 46 strategies may fit franchise owners and your goals. About a minute, and your answers stay in your browser.
Find my strategies →Free tax calculators
What could a strategy save you?
- S corp
- Solo 401(k)
- Augusta Rule
- Hiring your kids
- Oklahoma PTE