Gaining financial tips for franchise owners are more important than ever as you navigate today’s business landscape. Running a franchise comes with many advantages: an established brand, marketing support, and access to proven systems. But it also brings unique financial and compliance challenges, especially when juggling multiple outlets, franchise fees, and strict operational guidelines.
If you’re leasing your business premises, did you know you may be able to purchase the property through your SMSF? It’s a smart strategy some franchisees use to reduce rent costs and build long-term wealth — and it’s well worth exploring.
Whether you’re a first-time franchisee or scaling up, it’s essential to have robust financial processes in place to ensure smooth operations and sustained profitability.
1. Understand Franchise-Specific Costs
Unlike independent businesses, franchises often incur additional costs such as:
- Initial franchise fees
- Ongoing royalties or marketing levies
- Training costs
- Uniform branding requirements
It’s important to budget for these expenses and understand how they impact your break-even point. Having a clear financial model that reflects your franchise obligations will help you forecast with confidence.
2. Standardise Bookkeeping Across Locations
If you operate multiple franchise outlets, consistency is key. Centralising your chart of accounts, payroll processes, and bookkeeping approach ensures:
- Easier consolidation of financial reports
- Quicker decision-making across locations
- Simpler ATO compliance and BAS preparation
Using cloud-based accounting software like Xero and integrating it with your franchise’s POS or CRM systems can help streamline the process.
3. Don’t Underestimate Your Tax Obligations
Even if your franchisor provides templates and guidance, you are still responsible for:
- Accurate GST reporting
- Superannuation payments
- Payroll tax compliance (depending on your state and staff thresholds)
- End-of-year income tax returns
Many franchisees are caught out by PAYG instalments or inconsistent cash flow planning. A reliable accountant who understands franchising can make a major difference in your bottom line.
4. Stay on Top of Software Integrations
Many franchise businesses rely on multiple platforms: POS systems, rostering tools, ordering apps, and loyalty programs. If these aren’t correctly synced with your accounting software, it can lead to errors, duplicate entries, or missing data.
That’s why it’s essential to use integrations correctly and check that your bookkeeping setup reflects what’s happening on the ground in real time.
5. Do You Lease or Own the Business Premises?
If you’re leasing the property your franchise operates from, it’s worth considering whether you could own it through a Self-Managed Super Fund (SMSF). Subject to strict conditions, SMSFs are allowed to purchase commercial property, including the building from which your business operates.
Some of the potential benefits include:
- Paying rent to your SMSF instead of a landlord, which builds your super rather than someone else’s wealth
- Long-term asset security for your business location
- Tax advantages (such as rental income taxed at a concessional rate and possible capital gains tax concessions if sold in pension phase)
However, this strategy must follow ATO rules, including:
- The property must meet the ‘business real property’ definition
- The lease agreement between your business and the SMSF must be at arm’s length and reflect market rates
- The property can’t be used for residential purposes or be purchased from a related party unless it meets specific requirements
This is a powerful option for franchisees with long-term plans, especially when rental costs are high or you’re seeking greater control over your tenancy.
Helping Franchisees Run Smoother, Smarter Businesses
At Cotchy, we support franchise owners across Australia by managing their bookkeeping, tax ASIC obligations, and software integration maintenance. Whether you’re using Lightspeed, Deputy, or other industry tools, we handle the connections to create a streamlined financial system giving you clearer visibility and more time to focus on growing your business.
Let’s chat! Submit your details via our Contact Us form and we’ll organise a complimentary Zoom meeting to explore how we can help. Click here: Contact Us.
Source: Business.gov.au