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Tax Implications for Buying a Second Franchise & Exiting Your System with Tab Burkhalter

Tab Burkhalter is the managing partner of The Burkhalter Group, which is composed of a regional law firm, regional CPA firm, business start-up and back-office service provider (Numbers House) and commercial real estate lessor. Tab has extensive experience in helping franchisees establish their businesses.

Key Takeaways:

[0:18] Today’s episode of Franchise Euphoria is brought to you by IndyFranchiseLaw.com, a leading resource in the franchise space. Head over to IndyFranchiseLaw.com learn more!

[1:00] Our episode today features Tab Burkhalter, the leading manager at the Burkhalter Group and is also a CPA.

[1:51] Josh welcomes Tab Burkhalter to Franchise Euphoria.

[2:14] Tab takes a minute to tell Franchise Euphoria about his background as a CPA and how he came into the franchising industry.

[3:39] About 80% of the work Tab does deals with restaurants.

[5:07] One of the biggest decisions a franchisee can make when opening their second location is determining whether they will open a separate LLC to conduct the business.

[7:08] When setting businesses up, Tab suggests establishing yourself as an LLC but elect to be taxed as an S Corp so that you save on self-employment taxes.

[9:05] Tab suggests the second consideration franchisees should be making when considering a second location is what tax grants or incentives are there for where you’re putting your second location?

[12:42] When buying a second franchise, you must redo your due diligence in looking over the Franchise Agreement, because while you’re already familiar with the version you signed years ago, there have likely been updates made that you may or may not approve of.

[15:18] As has been evidenced in this episode, Josh notes how important it is to have a CPA on your team to make sure you get the proper deductions, make sure you’re doing things the right way, and ultimately save money in the long run.

[17:25] When you start planning your exit strategy for a franchise system, you need to familiarize yourself with the terms your franchisor has set out for you.

[20:51] In certain situations, Tab will sometimes advise the franchisee to purchase the property that the franchise is on, so that way they have some cards to play when negotiating a successor or just general corporation with their franchisor.

[22:21] Tab often finds that franchisees just look at the first three years of their business when cultivating a plan when they need to be thinking through five to ten years.

[25:11] If you want to learn more about Tab or seek his expertise, you can visit his website at www.TabBurkhalter.com or call (865) 984-4080.

[25:45] Thanks for listening, and please, reach out to Josh anytime through email at josh@franchiseeuphoria.com. If you enjoyed this interview, please leave us a review on iTunes.

 

Mentioned in This Episode:

josh@franchiseeuphoria.com

www.franchiseeuphoria.com

www.indyfranchiselaw.com

www.tabburkhalter.com

www.thenumbershouse.com

www.facebook.com/NumbersHouse

twitter.com/thenumbershouse

www.instagram.com/thenumbershouse

www.linkedin.com/company/the-numbers-house

Josh Brown

Josh Brown

Hi! I’m Josh Brown, franchise attorney and creator of the Franchise Euphoria podcast. I’m just your average guy who loves to golf, eat hibachi, and immerse myself in the ever-expanding franchise world.

My goal is to navigate entrepreneurs and all people interested in the current events of franchises through all the hottest topics and most popular tools for success. Going on four years now, Franchise Euphoria is hotter than ever and ready to help you plan and execute a pathway to success.

Josh Brown

Josh Brown

Hi! I’m Josh Brown, franchise attorney and creator of the Franchise Euphoria podcast. I’m just your average guy who loves to golf, eat hibachi, and immerse myself in the ever-expanding franchise world.

My goal is to navigate entrepreneurs and all people interested in the current events of franchises through all the hottest topics and most popular tools for success. Going on four years now, Franchise Euphoria is hotter than ever and ready to help you plan and execute a pathway to success.

pardee2003 from United States
11/16/2019
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Great and applicable information from professionals in the franchise world that are doing it every day. I’ve listened to 3 episodes: Gutter Brothers, Woofies, and Cycle Bar. Enjoyed all and looking forward to hearing more.
WTutor311 from United States
8/30/2019
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Highly recommend. Great guests. Filled with tons of helpful information.
Katie Joy B. from United States
7/16/2019
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Josh and his wide variety of knowledgeable guests are truly rockstars! They deliver quality (and free!) franchise knowledge and advice in each and every episode. The great advice they provide, combined with the engaging way they deliver it had me hooked from the very first listen. Thanks for putting out such a stellar show Josh - keep up the great work!
Jordan gross from United States
07/15/2019
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This podcast provides the advice necessary to start building, growing, and scaling your business TODAY! The host asks probing questions of his guests that add value to the listeners in an immediately implementable way!
VPugliese from United States
07/15/2019
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What do you get when you combine business savvy, legal expertice and a great personality? You get the ultimate podcast for franchise owners. Josh Brown brings it all togehter perfectly with Franchise Euphoria. Not only does he possess all of the skills and abiliites above, but he has great guests, asks awesome questions and created the ideal podcast for this niche. If you have a franchise, or are considering it, subscibe to this show and consume all of the content!
Mick James from United States
06/05/2019
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Started listening to Josh's podcast after the wife and I decided to buy a franchise and I quickly went through about 200 episodes on 1.5x & 2x, before signing on to purchase a franchise. Josh's info was an invaluable part of our decision to buy, and after listening to so many episodes, I felt like I knew and trusted him on a personal level, so it was a no-brainer to enlist his services when it came time to review the franchise agreement. Josh was super easy to talk to and very empathetic to our needs, and being first time business owners, we needed all the empathy we could get. Josh helped us negotiate a great deal with the franchisor and we were very happy with his services. Great podcast, great guy, great service to anyone involved in the franchise world!
Dean575 from United States
06/04/2019
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Very interesting discussion. I found the information valuable.
Summieysum from United States
05/06/2019
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I've just completed the legal process of franchising my business and have now begun selling franchises. Just found this podcast and it's an incredible resource! Great content and Josh is a very engaging host. Highly recommend for franchisors and franchisees.
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