Produced by Tolley

The following Corporation Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • Franchising
  • Tax treatment of franchises
  • Franchisor
  • Franchisee


A franchise is the grant of a licence to carry on a copycat business by a business (the franchisor) to a purchaser (the franchisee). The franchisee would, for example, be able to use the brand, marketing strategy, buying power, etc of the business out of which the licence is granted. The benefit of operating a business in this way is that the franchisor benefits from an up-front and ongoing stream of fee income, whilst the franchisee generates profits without having to incur the time and expense of establishing a new brand and business model.

A useful source of information on franchising is the British Franchise Association website.

Tax treatment of franchises


The fee received by the franc

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