Accounting Blog for Business

Accounting for franchise businesses is a complex matter and requires expertise, high-end technology, and a systematic approach to gain the most accurate and beneficial results. The additional factor is not simply accounting for franchise fees and royalty, but more of comparisons or financial benchmarking to plot out a strategic game plan that will make the entire franchise concept flourish.

Too often, business owners, particularly franchisors, focus keenly on the operations and compliance part of their entire franchisee network. As long as the business continuously makes a profit, sometimes, they don’t dig deep on how to understand and improve that franchise profit.

Adversity is an opportunity for change. For Assist Group, this adversity came when they found an accounting outsourcing service that didn’t meet their expectations and became a financial burden to the company. They took this opportunity to find a new partner that would better adapt to their business needs and gave offshore accountants a shot. This is where they met the team behind D&V.

Investing into a Franchise Business might seem very lucrative as it is a proven successful business model. However, as a franchisee aspiring to echo the success of your franchisor, it is better to have a basic understanding of franchise accounting concepts to determine if your franchise is being profitable or not. Here are some franchise accounting terms to get acquainted with before jumping into a franchise investment.

With too many sources of financial data, franchise businesses can face the following accounting challenges and it is important that you proactively address them before any bigger problems take place. For a franchise business to be successful, you have to ensure that all bases are covered before recruiting franchisees. Yes, you have a product and business strategy that is proven to be successful, however, you also have to start forming the backbone of your franchise business to give solid support to all your franchisees and prevent any kind of financial accounting problem. This includes all systems, mainly finance and accounting systems, and procedures that will foster an orderly process for your business.

Dispersed locations mean disparate data sources, and that is the inevitable nature of Franchise businesses. Looking back, you can only imagine how difficult it was to integrate all financial and non-financial data from several franchisee locations, making it completely challenging to compare performances and have an overview of business segments that are doing great, and those that need improvement.