Restaurant Expansion in 2025: Franchise Growth and Tax Strategies

Despite rising labor and food costs, restaurant franchising is booming in 2025. Major chains like Chick-fil-A, Raising Cane’s, and Jersey Mike’s are expanding aggressively across the U.S., while smaller regional concepts are looking to scale through franchising.

Why Franchises Are Growing

• Consumer demand for consistency: Diners trust established brands, especially in uncertain economic times.
• Easier financing: Lenders are more comfortable funding proven franchise models than independent start-ups.
• Shared systems: Franchises benefit from centralized supply chains, marketing, and training programs.

Challenges for Franchise Owners

• Upfront costs: Franchise fees, build-out, and equipment can easily exceed $500,000 for popular concepts.
• Royalty obligations: Ongoing fees cut into margins and must be carefully planned for.
• Labor pressures: Even franchises face the reality of higher wages and turnover.

Tax & Accounting Strategies

• Amortization of franchise fees: These costs are deductible, but require correct treatment to maximize tax benefits.
• Entity structuring: Choosing the right legal entity (LLC, S-Corp, etc.) is critical for liability and tax planning.
• Multi-unit ownership: With growth comes complexity — CPAs can help consolidate financials and manage intercompany transactions.
• Credits & incentives: Depending on location, franchisees may qualify for local economic development credits or hiring incentives.

Positioning for Success

Owning a franchise is not just about operations — it’s about long-term financial strategy. With the right tax planning, restaurant owners can position themselves for sustainable growth in an increasingly competitive environment.

Ready to scale your franchise with the right tax strategy?

At Shahbaz & Associates, we help franchisees understand the financial side of scaling so they can focus on running restaurants that thrive.
Contact us today to start planning your growth strategy.