The Full Scoop on Growing Culver’s Units
Authored by: Kim Wegner — Partner, CPA, CVA, CGMA | Date Published: January 16, 2026
When your guests redeem Scoopie Tokens for extra scoops of frozen custard, it’s always a win because more custard means more smiles. However, when you add extra units to your Culver’s portfolio, that same “more is better” mentality can leave you with a melted mess of cash flow problems and tax surprises you never saw coming. Upfront planning is essential to avoid these setbacks.
The systems that worked for your first restaurant often feel thin once that second location opens. The bank account that used to have a cushion now runs tight between payroll cycles, and tax notices arrive from states you barely even visit. Your accountant starts talking about controlled groups and consolidated returns, and you realize that scaling Culver’s units isn’t just about doing more of what worked before.
This isn’t a sign you’re doing anything wrong. It’s what happens when growth moves faster than your financial planning. The good news is that with the right preparation, such as a real estate cost segregation study for new properties, you can add locations without the surprises that create stress and financial strain.
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How Does Adding Locations Change Your Tax Situation?
When you operated a single Culver’s, your tax picture was simple. One location, one set of books, one quarterly estimate. But the moment you sign the lease on location number two, the IRS starts looking at your business differently.
Multi-unit Culver’s operators often use separate LLCs for each location to keep risks separate, but this structure also changes how you are taxed. Each entity can choose different tax classifications, so your total bill depends on how these pieces work together. What worked at one location might create problems at two or three.
The speed of your growth matters more than you think. If you open two stores back-to-back, you might be in a lower tax bracket; something you don’t want to waste. Quarterly tax estimates become more dynamic and unpredictable.
State taxes add another layer to your responsibilities since each state where you do business has its own rules for registration, income taxes, and reporting forms. What was easy with one location becomes much more difficult when you are running Culver’s restaurants in multiple states. You are not just dealing with different tax rates, but also with the different definitions of taxable income and the separate deadlines for each area.
What Are Controlled Groups?
The term “controlled group” sounds abstract until you realize it has a direct effect on your tax bill. When you own multiple entities under common control, the IRS treats them as a single taxpayer for certain benefits and thresholds.
This status changes how you handle everything from employee benefits to tax limits. You should check these rules whenever you change ownership of items in your stores. Tax credits and lower tax rates that used to apply to each store separately might now apply to the group as a whole.
For example, say you have separate LLCs for your three Culver’s locations. Each store might look small on its own. But if you own more than 80% of each, they are a controlled group. That Section 179 deduction you wanted to take at each location? You now have to split that one deduction among all three. The same goes for other credits and write-offs.
The rules get even tighter when family members own parts of different stores. Rules about “constructive ownership” mean that a stake owned by your spouse or children might be counted as yours. What appears to be separate ownership on paper is often treated as a single group for tax purposes. Missing this detail is one of the most expensive mistakes a Culver’s owner can make.
How Do You Build Reserves That Work with Your Tax Strategy?
Cash reserves are not just money sitting in a vault. They are a tool to help you time your income and expenses, so you pay what you owe without losing your flexibility. When you save with a plan, you have built a down payment for your next location.
Proper use of the tax code can help you generate cashflow for the next location, allowing you to build wealth faster.
The One Big Beautiful Bill Act (OBBBA) changed the rules for bonus depreciation. Knowing how these rules apply helps you decide when to buy equipment and how to pay for it. These depreciation rules can change how much cash you have on hand from year to year.
What Steps Should You Take Right Now?
Growth should pay for itself rather than becoming a drain on your life. When you understand how adding locations changes your tax bill, you can stay ahead of it and build a financial foundation that supports your expansion.
Start by reviewing your current setup with a CPA who understands how multi-unit restaurants operate. Get a clear handle on your state tax duties. If you want to open across state lines, investigate those rules now. Some states require you to be registered before you sign a lease.
At MBE CPAs, we work with Culver’s owners who want to grow the right way. We have seen what works and what leads to a crisis. The difference between a smooth opening and a cash flow struggle usually lies in the planning that happens months before the doors open.