To enjoy the tax benefits of owning a franchise while being on the cutting edge of the way organisations operate, you may find a digital marketing franchise is just what you have been searching for.

Why a Franchise?

Starting a business that offers services such as social media marketing, content marketing, SEO, and a digital marketing strategy from scratch can seem like a daunting task. A franchise business paves the way for success by sharing the franchisor’s image, intellectual property, and established business processes. You can  be well on your way to building a significant business in no time flat!

Tax Benefits of Owning a Franchise

When you are looking to open a small business, you want to take advantage of all the tax breaks available. A tax-effective opportunity for franchises is found under Section 12J of the Income Tax Act. Formed as an incentive to South African taxpayers to invest in particular areas of the local economy, Section 12J offers considerable tax relief on the amount invested.

When buying a franchise, instead of paying the franchisor directly, (with no tax deduction on the amount paid), you can use Section 12J to invest in a venture capital company (VCC). The VCC then purchases the franchise, and you can deduct the purchase price from your taxable income. This makes your investment a lot more affordable.

As the investor, you receive a defined A-class shareholding in the VCC, giving you control of the franchise. All economic growth and dividends are ring-fenced for the A-class shareholders.

Bonus Benefits of a Digital Marketing Franchise

Not only does the tax break drive franchise owners, there are additional financial benefits:

Economy of scale. As part of a franchise network, you enjoy the advantages of economies of scale in the supply of goods and services, marketing, research and development, and technological expertise.

Financing. Whereas banks are reluctant to finance entrepreneurs’ abstract and unproven business plans, having the background and reputation of the franchise, along with financial indicators of existing franchisees benefits your standing point with banks.

Unibit Solutions is a full-service digital marketing agency and a member of the global WSI family. WSI has been franchising for over 20 years, continuously evolving the business model to ensure relevancy and profitability in a dynamic industry. If you would like to find out more about joining our elite team of digital marketing experts, contact us today!