Why choose a franchise accountant?

The Franchising Code of Conduct states prospective franchisees must be advised to obtain independent accounting and business advice. But is it really necessary? Who should you get advice from, and what should you ask? Let’s take a look… As a franchisee, your income will depend on the financial results of the business, you’ll be investing your own money and probably taking on debt. Therefore, it’s wise to carefully consider the financial implications.

Franchise Disclosure Documents contain important financial information that (when used and understood properly) can help you make an informed decision. However, it’s not always easy to make sense of – especially for people who are unfamiliar with franchising and financial matters. That’s why it makes sense to consult an accountant who understands franchising.

The right accountant can be a great help in your franchise journey. They can help prepare financial forecasts, identify risks and bring an independent perspective. But when it comes to franchising matters, all accountants are not the same!

It’s important to understand there are different types of accountant. Some focus on personal income tax - you might have used one to do your own tax return. Others mainly work with established businesses. A few specialise in franchising; they understand the special features of a franchise that don’t apply in other businesses.

Once you’ve found an accountant, what advice are you looking for? An important part of their role is to help you understand the financial aspects of the business. They should be able to help you answer these three questions:

1. How much will it cost to start the business?
2. What will it cost to run the business day-to-day?
3. What sales are needed to cover the costs?

Your franchise accountant should also highlight the main financial risks relevant to your circumstances.

The financial side of buying a franchise is really important and needs to have your attention. That’s why the Franchising Code recommends you get advice on this aspect, and it’s best to choose an accountant who understands franchising issues.

This article was first published on www.franchiseaccounantsnetwork.com