4Thought Blog

As you reach the end of your covered period for your Paycheck Protection Program loan – if going with the 8-week option – here are some tips for getting ready for the forgiveness application process.

You may have seen our recent article about the new EZ forgiveness application. Eligibility for that application is a matter of interpretation.

Whether you can or can’t use that application will depend on your ability to and comfort with certifying to the SBA that you have not been able to operate at the same level of business activity during your covered period as you did prior to Feb. 15, 2020. Your records, both financial and otherwise, would need to show that your business activity was impacted due to government mandates related to COVID.

Restaurateurs should pay close attention to their monthly reports from third-party delivery services to see if the delivery services are remitting state sales tax on the delivery orders on their behalf.

Uber Eats started remitting state sales taxes last year and now remits state sales tax in 32 states. You can view the entire list here to see if your state is included.

DoorDash recently started remitting state sales tax in Pennsylvania and Washington state, and Grubhub has started in a few states, as well.

Tax reform changed the rules on business meals and entertainment.

Here’s a reminder of what McDonald’s Owner/Operators should know about the current tax laws regarding employee meals, business meals and entertainment expenses and how best to track them.

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.

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.

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.

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.

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.

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.

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.