Tax treatment of gift cards

As the holiday season approaches, gifts will be bought with increasing frequency. Have you ever considered how gift cards that go unredeemed are viewed by Federal and State taxing authorities? What are the revenue recognition rules and the escheatment standards that companies need to be aware of? Revenue Recognition The timing of recording taxable income …

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New tip pooling rules proposed by Department of Labor

Operators of full-service restaurants should take note of recent developments from the United States Department of Labor, regarding regulations governing the use of tip-pooling arrangements. There is one caveat to be aware of, which is that the non-tipped duties must be performed in conjunction with tipped duties, or within a reasonable amount of time before …

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Get your restaurant business ready for sale

You built a successful restaurant operation and are now thinking about selling. What do you need to think about to make your business ready to sell? And importantly, maximize the proceeds you will receive. Any sophisticated buyer will go through a due diligence process. What this means will be somewhat different depending on what legal …

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Risks for restaurants you may not have considered

When most business owners think of potential risks their restaurant could face, I would bet the first thing that comes to mind would be food safety. And rightly so. The health and safety of your customers should be top of mind. All restaurant owners should be aware of the regulations they are subject to, what …

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New lease standard: Anticipating the transition impact

FASB has just given the go-ahead to delay the effective date of the new lease standard for private companies for another year. Now it won’t be applicable until 2021 for calendar year ends. But it is still important to envision what the impact will be to your financial statements. Our earlier blog, “New lease standard: …

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Franchisor financial information disclosures

If you are looking to franchise your restaurant brand or are relatively new to franchising, it is important to understand your requirements for providing financial information within your Franchise Disclosure Document (FDD).  The first requirement relates to financial information of your franchising entity. Item 21 in the FDD requires you to provide copies of your …

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Accounting for third-party delivery services

Third-party delivery services like Grubhub, DoorDash, UberEats, and Postmates have been growing in popularity over the past few years and will continue to grow. The industry is currently over a $15 billion dollars and is expected to grow at least 10% to 15% per year over the next five years. These services provide consumers the …

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4 Tips to maximize your restaurant group’s value

The mergers and acquisitions (“M&A”) market continues to be quite healthy compared to historical periods. The reason the M&A market is so healthy is because of the amount of excess capital available to fund alternative investments. For example, private equity funds (“PE”) and family offices have excess cash on their balance sheets and are looking …

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New revenue recognition standard: accounting for gift cards

Gift cards are a great way to attract new customers, increase your Company’s brand awareness and improve sales. Many gift cards are used in more than one visit by the consumer, and some gift cards never get used. Admit it, you have an un-used gift card hanging out in a drawer at home. So, how …

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Tax considerations when selling your restaurant

Successful restaurant companies are a hot commodity in today’s marketplace with existing operators looking to diversify segments served or leverage economies of scale through acquisition – and let’s not forget the private equity group interest. If you’re thinking of selling your restaurant, it’s important to know the value of your company to get top dollar …

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