Franchise Q&A Carl Reader
Director, Dennis and Turnbull, franchise accountants
Q: What are the benefi ts of using a national accountancy fi rm for my franchise?
A: Franchisees looking for an accountant have myriad choices available, but which is the right one? The obvious choice is a fi rm that specialises in the franchise industry. Where the franchisor has not provided guidance, however, some franchisees look to save a few pounds by paying a friend or relative, others choose a local guy, some go for a purely online solution, whilst a few opt for one of the large national fi rms.
Where a franchise network operates with a diff erent accountant for each franchisee there is the opportunity for huge inconsistency and, of course, the chance of signifi cant errors, all out of the sight of the franchisor. Also bear in mind that all these accountants are working on the same business model, just at diff erent development stages. This is why a specialist accountant working network- wide can provide so many benefi ts. When it comes to franchising, there are only a handful of fi rms who meet with the annual accreditation as British Franchise Association (bfa) professional advisers. This ‘Affi liate’ member status demonstrates that the fi rm is operating to the industry’s best practice. Why is this important? It means that the fi rm understands franchising, the relationships and the legal intricacies. There are benefi ts for both the franchisees and the franchisor. Benefi ts of a network accountant to both franchisees and franchisors are: • The accounts and bookkeeping of the franchise should be consistent across the network and tailored specifi cally to the requirements of the business model and franchisees
• It enables simple reporting and benchmarking providing the franchisor with the information to off er more relevant support to their franchisees in helping them grow their businesses
• Franchisees can have the development of their business compared with others in the network, which can help identify and mitigate any common plateaus
and pitfalls as they grow, for example approaching cashfl ow lumps
• Network accountants understand the legal intricacies of franchising and can uncover signifi cant savings for all franchisees – one network of franchisees enjoyed over £1.1million in tax savings last year from a simple, entirely legal, change to the business classifi cation with HMRC
• Franchisees of a network accountant benefi t from a bespoke package of services paid monthly at a fi xed fee, all negotiated for the network by the franchisor. The economies of scale mean franchisees receive the exact services they need saving money, whilst ensuring they are all compliant with HMRC
• With all franchisees operating with the same accounting and bookkeeping systems, as with the business model itself, it is much easier and far more cost- eff ective to provide support. This applies to both new and existing franchisees where running the fi nancial elements of the business may not be their strength
One of the biggest misconceptions about running a small business is that changing accountants will be diffi cult. In reality, where a franchisor has already agreed a network-wide package of services and negotiated a favourable price, it really is as simple as confi rming their direct debit details for the franchisee. The new accountant then handles everything else. It really isn’t any more complicated or time consuming than that.
Paul Clegg
Managing director, Coconut Creatives
Q: I’m hearing a lot about Discovery Days – what are these, and are they worth attending?
26 |
BusinessFranchise.com | April 2017
A: Discovery Days are a great way to fi nd out more about your chosen franchise opportunity and assess whether or not it’s right for you. You must bear in mind, however, that it’s also a chance for the franchisor to get to know you and assess your suitability for their network. Attending a Discovery Day shows the franchisor that you’re serious about joining their network and gives them a chance to assess your suitability before off ering you the opportunity. It’s more than just a chance for you to fi nd out more. Treat it a little like a job interview, present yourself well, and make sure you have a list of questions prepared that show you have researched the opportunity well and are keen to move forwards.
The franchisor will already know a few things about you but make sure your knowledge and the research you have done comes across well, they want to know that you’re someone who’s going to be driven and motivated to grow and develop a successful business so make sure your passion shines through. Be fi rm, honest and confi dent when discussing your intentions about joining; it can be a huge red fl ag to many franchisors if you’re don’t appear to be fully committed or excited about the opportunity. Finally, make sure you have all questions
answered, not just yours but any that the franchisor may have of you. It is far easier to do this face to face at a Discovery Day than later on the telephone.
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