A very clear answer is given in HMRC Agent tool kit – Capital Vs Revenue: Page 15
|Sole Trader/Partnership||Capital Expenditure. No deduction in computation of trading profits.
Deduction available under Capital Gains Tax on sale.
|Companies||Special Corporate intangible assets regime applicable.
Deduction available as per accounting treatment – amortisation over the lifetime of the franchise agreement is normally allowable.
This again demonstrates how useful agent toolkits are and should be used regularly.
Moral of the story:
When taking a franchise always take it under a limited company.