BDO Restaurant CFO Bootcamp Event Recap

From September 21 to 23, Las Vegas played host to BDO’s Restaurant CFO Bootcamp. The three-day event catered to industry professionals including independents, franchisees, franchisors and more. Throughout those three days, key issues and trends were discussed among industry colleagues, including:
1. Understanding and recognizing opportunities to minimize tax bills
While some may cringe at the thought of more regulation, recently issued repairs and maintenance regulations could be taxpayer-friendly. Specifically, the new rules help restaurants determine whether certain expenditures should be capitalized and depreciated or immediately expensed. Given that restaurants are typically asset-heavy and require frequent upkeep and maintenance, the new regulations may offer opportunities for restaurants to alleviate some of their tax liability surrounding those activities.

Additionally, strategically structuring entities can help restaurants lessen tax obligations, and is especially important to keep in mind when opening multiple locations. When approaching tax structure and opportunities, restaurants should take the time to understand their unique positions so they can minimize their tax burden.

2. Accounting issues and reporting
Recent Accounting Standards Updates (ASUs) promulgated by the Financial Accounting Standards Board are set to significantly change the landscape of financial accounting and reporting within the restaurant industry.  These standards include ASU 2016-02: Leases, ASU 2014-09: Revenue from Contracts with Customers (ASC 606) and ASU 2016-04: Recognition of Breakage for Certain Prepaid Stored-Value Products

Any change in accounting standards requires careful preparation and a thorough understanding of its potential impact on business practices. With ASC 606 set to enter into effect for the 2017 fiscal year, revenue recognition may be a particular area of focus for restaurant CFOs over the next several months.

3. Preparing for investment
With the restaurant industry remaining over-saturated, institutional and private investors are continuing to keep their cash on the sidelines as they struggle to identify good deals. Well-run restaurant concepts and operators, however, are seeing opportunities to attract potential debt and equity financing by setting themselves apart from the pack.

Speakers touched on many of the issues facing restaurant operators as they look for outside investment, including deal structure and terms, corporate formations, raising capital and avoiding pitfalls and mistakes.

4. Current state of PCI compliance 
Between increased demand for mobile ordering and payment capabilities, as well as regulations requiring secure EMV chip card processors, restaurants are investing more in technology than ever before. Businesses are under pressure to bolster their mobile capabilities to meet customers' growing expectations for convenient and secure ordering and payment systems. In addition, the advent of EMV-compliance means that restaurants must have payment systems and terminals in place that are capable of reading and processing chip card transactions in order to avoid potential liability for credit card fraud. In this highly competitive space, restaurants that do not focus adequate energy and dollars on strengthening and securing their technology systems may find their doors closed.  

5. Unclaimed property and gift cards 
With the holiday season quickly approaching, restaurant executives are brushing up on rules associated with gift cards. Regulations governing escheatment compliance can vary significantly among states, particularly pertaining to definitions of gift cards/certificates, filing due dates, variant dormancy periods and even the different treatments of reloadable and non-reloadable cards. Restaurants most susceptible to escheatment exposure include those operating across state lines without a gift card policy and little to no escheat compliance. Moreover, online gift card sales add complexity, as a restaurant can be subject to unclaimed property regulations.

If you missed us at CFO Bootcamp, or if you have any questions, contact your BDO Restaurant professional. And be sure to keep up with the Restaurant practice’s latest thoughts by following us on Twitter at @BDORestaurant.