Is a franchise fee an expense of a business that would reduce it’s net income?

Question by re_love1: Is a franchise fee an expense of a business that would reduce it’s net income?
I am thinking about starting my own business and I have looked into some franchises. Most come with a sizable franchise fee and I was wondering if that fee can be expensed to the business and thus lower net income

Best answer:

Answer by Marc D
Yes. It is a start up expense. You would not take the hit for it as a personal expense; you would certainly keep it as a debit on your business’s ledger.

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