Hi All,

If a business becomes a franchisor, can it part own any of the franchises?

E.g.
Entity 1 is an established business and becomes a franchisor

Entity 2 is set up and becomes a franchisee

Is Entity 1 able own any percentage) of entity 2?

Thanks
Frank

Hi Frank,

Short answer is yes. BUT be careful of Payroll Tax issues down the track. A subsidiary of another entity is automatically grouped for Payroll Tax Issues.

I am not Lawyer but franchise laws should permit this to occur. I actually have something kinda similar. I run 5 Accounting firms and I run the franchise and then I own parts of the franchisees.

Make sure you get some good structuring advice.

AJ