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McDonald’s Franchisees: Be Aware to Combat Employee Fraud

Posted by Angel Chiariello on Tue, Nov 5, 2019

Hardworking employees are to be treasured and valued for the contributions they make to your restaurants, but unfortunately as any experienced restaurant owner knows, not every employee is earnest.

Employee fraud is regrettably commonplace in many businesses. Near our office in St. Petersburg, Fla., there was a recent case involving a Dunkin’ doughnut shop manager who created a fake or “ghost” employee and collected and cashed their paychecks.

Ghost employees are a real problem for many businesses with a lot of employee turnover, like McDonald’s and other quick-service restaurants. It’s among the most common types of payroll fraud, according to the Association of Certified Fraud Examiners.

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Topics: McDonald's management

Restaurant Industry Scorecard for Q2 2019

Posted by Adam Berebitsky and David Rice on Thu, Oct 3, 2019

Through the second quarter of 2019, the restaurant industry continued to demonstrate solid performance, weathering shifting dining habits, increasing labor costs and continually fluctuating commodity prices. Same-store sales rose a healthy 1.8% across the industry, thanks in part to strong consumer spending in restaurants.

But savvy restaurants didn’t rely solely on strong consumer spending – they continued to implement strategies which demonstrated a positive impact in 2018 and early 2019. Whether through limited time offers (LTOs), a strengthened digital presence, in-house delivery capabilities or menu price increases, restaurants are recognizing that a tailored approach to drawing in customers is the key to withstanding industry challenges.

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Topics: McDonald's management

The Must-Know Tax Reform Business Changes for McDonald’s Franchisees

Posted by Angel Chiariello on Tue, Sep 3, 2019

The largest tax change in a generation was made almost two years ago, but it’s still big news for small businesses. In fact, final regulations are still being written. As we prepare to head into fall, this is a good time to think strategically about your tax situation.

This article will highlight a couple of key business tax changes for McDonald’s franchisees, specifically depreciation changes and something new called the qualified business income deduction.

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Topics: McDonald's management, 2017 Federal Tax Reform

Restaurant Industry Scorecard for Q1 2019

Posted by Adam Berebitsky and David Rice on Thu, Aug 1, 2019

Despite evolving customer expectations, continued pressure on profit margins and fierce competition, the restaurant industry fared well through the first quarter of 2019, with same-store sales up an overall 1.5%. To preserve profitability and reclaim foot traffic, many industry players are recognizing that a departure from business-as-usual is the key to continued success.

But, given the maturity of the restaurant sector, what does this departure from business as usual entail? For some, it means making enhancements to their digital presence, rolling out delivery capabilities, or introducing promotions and loyalty programs to drive same-store sales and offset increasing labor costs.

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Topics: McDonald's management, Restaurants

Employee Shift Meals Remain 100% Deductible for Tax Purposes

Posted by Lisa Haffer on Wed, Jul 3, 2019

Great news! Important tax guidance was released in late December 2018 that is considered to be a significant victory for the restaurant industry: Employee Shift Meals Remain 100-percent deductible for tax purposes.

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Topics: McDonald's management, 2017 Federal Tax Reform, Restaurants

Hiring Minors to Work at Your McDonald's? Know the Rules

Posted by Concannon Miller on Tue, Jun 4, 2019

Hiring young people can be beneficial for all parties. But before McDonald's franchisees make any job offers, you should be fully aware of how youth employment is regulated under the Fair Labor Standards Act. When employers fail to comply with these obligations, they can be prosecuted by the Department of Labor. And if the prosecution is successful, the DOL will likely publicize the results as a sobering reminder to all employers of the FLSA requirements.

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Topics: McDonald's management

Monitoring Contribution Margins: The Benefits for McDonald’s Franchisees

Posted by Ryan Moore on Wed, May 8, 2019

A sixteenth century English romance writer named George Pettie once quipped, “So long as I know it not, it hurteth mee not.” In other words, what you don’t know can’t hurt you.

While the merits of this sentiment may be debatable, one version of the opposite certainly is not: What you do know can help you. Especially when it comes to your McDonald’s business: Financially speaking, what you know or can learn from past performance – both recent and over time – will help you make better decisions in the future.

Regular analysis of certain metrics is how you can make your business more profitable, avoid making poor decisions (again), and separate yourself from the ever more crowded marketplace. One such financial metric that is often overlooked yet unquestionably important for you to analyze and understand is contribution margin.

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Topics: McDonald's management

Minimizing Tax Liability without QIP Guidance

Posted by Lisa Haffer and David DesRoches on Thu, Apr 4, 2019

Restaurant owners who invested in interior improvements in 2018 may be surprised when they receive their 2018 tax returns and see higher than expected tax liabilities. This is a result of an inadvertent drafting error in the Tax Cuts and Jobs Act (TCJA) relating to the depreciation of restaurant improvements.

Before the TCJA, the tax law provided rules for multiple categories of restaurant property assets, many of which were eligible for favorable tax depreciation benefits. To simplify the rules, tax reform consolidated the categories applicable to interior improvements into the single category of Qualified Improvement Property (QIP).

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Topics: McDonald's management, 2017 Federal Tax Reform, Restaurants

Attention Business Owners: New Draft Overtime Rules to Know

Posted by Concannon Miller on Thu, Mar 21, 2019

Today (and since 2004) salaried employees who earn at least $455 per week aren't eligible for overtime pay under the Fair Labor Standards Act, if their job duties are executive, administrative or professional (EAP) in nature. That's true no matter how many hours these employees work in a week. 

Under proposed regulations, the limit would rise to $679 in 2020. So, salaried employees earning up to around $35,308 annually would be overtime-eligible even if they fall into those EAP job roles as defined by the Department of Labor (DOL). 

Although the jump in the threshold is substantial, it's not nearly as high as the $913 weekly pay threshold set in an earlier version of the proposed regulations. If that version — which was blocked by a federal judge — had passed, it would've been much more costly to employers.

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Topics: McDonald's management, Business consulting

Should a McDonald’s Franchisee be a C Corp? Pros & Cons

Posted by Ryan Moore on Thu, Feb 7, 2019

Now that tax reform through the Tax Cuts and Jobs Act of 2017 is no longer breaking news, it’s time we take a closer look at a question that arose for McDonald’s franchisees as a result of the change in the tax law.

One of the headline reforms of the new legislation was the slashing of the corporate tax rate from the graduated maximum of 35% to a flat 21%. This begged the question, “Is it now more beneficial for a McDonald’s Owner/Operator to be a C Corporation than a pass-through S Corporation?”

Without examining the merits of the latter choice of entity type, let us instead lay out some (but not all) of the pros and cons of operating your McDonald’s business as a C Corporation.

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Topics: McDonald's management, 2017 Federal Tax Reform

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