I love franchises. Who doesn’t love a business that is completely replicable? They are created to provide the same experience to the customer no matter the owner or location. Franchises spend an exorbitant amount of time and money making sure that they train and prepare the franchisee to create the same experience.
As a young wage earner my first job was at McDonalds. I spent 6 years working my way up through the ranks to finally settle on the 1st Assistant Manager position. It was my last position before I decided to end my career but by that time I had learned a fair amount of business management training.
I look back on the experience grateful for the opportunities it provided. It was hard work but I learned about labor cost, waste, inventory control and scheduling. I managed rush hours with 20 staff and late nights with 2 staff members. I learned about cleanliness and appearance of the restaurant. These were all experiences that would help me to later understand how to run my own business. It has also given me a special appreciation for franchisees.
Franchise accounting is interesting. Depending on the franchise the accounting system will be strict with very rigid instructions or it will be more flexible but no matter the franchise there will always be a specific way the reporting must be done. No matter the system I have found that there is no way to put accounting in a box. It’s just not possible to make everyone who buys a company an accountant. That’s where we come in.
Accounting system design is definitely an art. We design the system for the particular reporting requirements. Franchisees are busy individuals; design of accounting is generally not in their vocabulary. Their worries are hiring/firing, scheduling, inventory and cash flow. It’s the big picture stuff and it’s a lot to learn all at once.
Another opportunity that a franchisee may not be aware of is the tax advantages allowed to small business owners for equipment purchases and certain leasehold improvements. Depreciation of fixed assets are dealt with in the first year of filing and great tax savings maybe missed if you are not using an experienced professional to help you with your annual tax filings.
Royalties, the main way that a Franchise receives ongoing payment for the use of the name and support are usually dependent upon the accuracy of the reporting. These days the POS systems are connected to a main cloud server so the Franchise knows a lot about the business but they still require a full financial statement.
So, as you can see, accounting design and record keeping, tax advantages and royalties are all good reasons to consult a professional for help. These are not items you can buy in a box it’s specialized knowledge and skill in franchise accounting and WE HAVE IT!!!
Give us a call if you are a new franchise owner or a seasoned owner ready for a change! We are here to simplify your life!