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Why the Franchisee Accountant?

 Why the Franchisee Accountant?

As more and more individuals begin to investigate Franchising they will need to recruit a qualified Certified Public Accountant as part of their team. 

Franchise savvy accountants are an important part for any successful analysis of a franchise or franchise endeavor.  

Franchise oriented accountants can assist with a thorough evaluation of financial elements of the FDD (Franchise Disclosure Document). 

Franchisor financials, the totality of the investment, and in particular FDD items 5,6,7,8,19,20, and 21 that are made part of the 23 items in the FDD.

Specifically, those items are:

  • Initial Fees
  • Other Fees
  • Estimated initial investment
  • Restrictions on Sources of Products and Services
  • Financial Performance Representations
  • Outlets and Franchisee Information
  • Franchisor Financial Statements

The Franchisee accountant should be familiar with the critical elements of the franchisors FDD and contract that relate to the financial aspects of the franchise.  

A good Franchisee accountant can likely assist you with your business planning and submissions for any financing, grants, or loans that you may wish to pursue.

The business plan and your requests for capital go hand in hand.  Here, the Franchisee accountant becomes a valuable resource.  He or she may also assist in discovering and reviewing the Franchisors business planning. 

With agreements that last 5,10,15, and 20 years along with renewals it doesn’t hurt to know in what direction the Franchisor is going, how they propose to get there, and whether they are financially capable of doing so.

In summary the Franchisee Accountant is an integral part of the due diligence and “investigation” stages as a potential Franchisee pursues a franchise opportunity. 

Any worth their salt will use the “pressure relief valve” while helping you to understand the nuances of the franchisors financial status. 

They’ll of course help you before you make a final decision and even afterwards if you wish to use them for filings of your taxes, advice on incorporating, and other numerous items that your Franchisee Attorney may not have covered with you.

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