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Franchise fees

I am part of a franchise and pay a monthly franchise fee based on 10% of sales. i receive a monthly invoice from the franchisor. How should I classify this ?

It sounds to me like a cost of sales thing (i.e. some nominal in the “purchases” range - you might have to create a new one) given it’s directly linked to your turnover, but I’m not an accountant so don’t trust my advice over theirs.

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As another non-accountant I would concur with it being a cost of sales and I think you would need to define a custom nominal for this.

Any fixed fees would, I think, be overheads and would probably put these under “licenses”.

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