There are several benefits to running your own food franchise business. Brand recognition and corporate support are among the most well-known advantages. Many franchisees enter the industry looking to work with a specific brand or franchise concept that caught their eye as a consumer, while others hope investing in a well-known franchise will help them to cash in on up-and-coming food trends. There are endless other benefits to running a franchise, including but not limited to financial opportunities. One of the most overlooked of these benefits are the tax advantages that come with running a food franchise. Multitudes of deductions and unique opportunities to grow wealth make long-term success a very real possibility for a new food franchisee.
Business deductions aplenty
Food franchisees benefit from several tax breaks extended to those in charge of their own businesses. The Houston Chronicle notes that the IRS allows those running their own businesses to deduct the entirety of their premiums in cases of medical emergencies. One can often deduct their co-pays as business owners as well. A large percentage of the company's business expenses can be written off, protecting the income of the business owner and creating more breathing room in the budget to invest in supplies and technology that could help bring in new customers. The IRS reported that you can deduct your franchise tax as well. Franchisees typically meet with financial experts before buying in to a franchise. Use this opportunity to evaluate the tax break possibilities associated with starting your own business.
Opportunities to shelter earnings
Small business owners are allowed to withhold a large amount of their earnings each year for their retirement, taking a large tax deduction on these funds by storing them away for later, said small business expert Barbara Weltman. Franchisees can take advantage of these rules to help build their own personal wealth and protect their earnings from the penny-pinching inclinations of Uncle Sam, according to Small Business Trends. As a franchisee, your financial flexibility also benefits from the ability to deduct interest accrued on credit cards when the purchases were made for the sake of the business. This perk allows you to minimize losses to interest in the long run when the business is forced to make investments on credit.
Cut costs of franchise travel
Franchisees at successful brands are typically provided direct access to the company's decision makers. Often these meetings occur at conferences or business trips that take place throughout the year, assuming franchisees have the necessary funds and free time to afford the trip. Thankfully, travel expenses made for trips related to the franchise can be deducted. This perk allows you to take full advantage of the educational opportunities that your franchise owner has to offer its new franchisees. New insights gleaned from these seminars and strategy sessions can help to enhance the overall performance of your store.