Choice Hotel Franchise Accounting

Franchise Accountants of Atlanta

As a franchisee of a company such as Choice Hotels, entrepreneurs such as you conduct business under a particular brand name. With that connection comes much more than just the ability to erect a “Choice Hotel” sign or have a listing. Franchising offers considerable advertising, marketing and other business support from the parent brand company. For a Choice Hotels franchisee, these benefits mean access to centralized room booking and reservations via call centers and online, advertising and customers taking advantage of discounts and rewards offered by Choice Hotels.

According to its site, Choice Hotels touts a Choice Privileges Loyalty Program with more than 37 million members. An Atlanta franchise means the potential for guests who have Choice Hotels apps on smartphones and other mobile devices.

Financial requirements for Choice Hotel franchising

Our franchise accountants alert Choice Hotel franchisees to the upfront funding needed to start one. One such cost consists of an affiliation fee, which Choice Hotels might finance at zero-percent interest to qualified franchisees.

Having an Atlanta franchise also requires significant funds for other upfront costs, such as buying land, constructing the hotel and purchasing equipment and supplies to start operations. This may require a loan or equity from an investor or group of investors. If you’re part of an ownership group, your franchise tax preparation and planning should involve considerations of whether you want to organize and run the business as a partnership, limited liability company or corporation. The choice affects how your profits are taxed.

Accounting and tax planning for franchisees

Our franchise accountants assist with franchise tax planning and preparation. Operating a franchise can create many issues related to income and expenses. With regard to the latter, depreciation and amortization allow you to deduct start-up costs over a period of years. Federal tax laws and regulations prescribe depreciation periods based on the type of asset you purchase. This determines how long you can write off a purchase.

Business deductions also include the interest on most of the debt your enterprise incurs, licenses and fees owed to state or local governments, legal fees for contract review and preparations, closing on land purchases and loans; salaries and wages and utilities such as water, sewer, electric, cable or satellite television, and internet.

In our franchise tax planning and preparation services, we can help you with unique issues regarding when and how to treat revenues. Unlike many other businesses, hotels must contend with cancellations of reservations, room rates that vary by location, season and other factors affecting demand for rooms. This affects not only reporting on taxes or balance sheets but especially forecasting revenues and preparing budgets. Our franchise accountants also have skills in helping you identify other sources of revenue, such as groups who conduct seminars, meetings and other events in your conference and meeting rooms.