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I am buying into a franchise. How should I code my Initial Franchise Fee, The setup fees, and my monthly recurring Franchise Royalty fees?

 
Best answer 05-16-2019 06:59 AM

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Established Community Backer ***

Re: I am buying into a franchise. How should I code my Initial Franchise Fee, The setup fees, and my monthly recurring Franchise Royalty fees?

The initial franchise fee is an intangible asset, and you depreciate it over 15 years. QB does not have that type of asset account but if it were me I would use a fixed asset type with an associated depreciation account.
https://www.law.cornell.edu/uscode/text/26/197

 

Any fees you paid for training before the franchise was up and running get added to the initial franchise fixed asset account

 

royalty and advertising fees are an expense in the year you pay them

 

2 Comments
Established Community Backer ***

Re: I am buying into a franchise. How should I code my Initial Franchise Fee, The setup fees, and my monthly recurring Franchise Royalty fees?

The initial franchise fee is an intangible asset, and you depreciate it over 15 years. QB does not have that type of asset account but if it were me I would use a fixed asset type with an associated depreciation account.
https://www.law.cornell.edu/uscode/text/26/197

 

Any fees you paid for training before the franchise was up and running get added to the initial franchise fixed asset account

 

royalty and advertising fees are an expense in the year you pay them

 

Experienced Member

Re: I am buying into a franchise. How should I code my Initial Franchise Fee, The setup fees, and my monthly recurring Franchise Royalty fees?

Thanks for your help.