I'm considering buying an accountancy franchise.
Be very, very, very careful.
There was a recent thread on this topic that you might find useful - Thinking of an Accountancy Franchise?
No! No! No! Please No!
I joined a franchise. The worst thing I did. I wasted two years of my working life, my confidence took a real knock and I lost £30k of my nest egg. There are crooks out there who will be all smiles, will be very welcoming and make you believe it all be okay join us. RUBBISH. The one I joined were nothing more than well spoken crooks in suits.
Furthermore, there were many other franchisees with these crooks who were doing really badly. There were not offered any support, apart from receving regular letter - "your fees for the last three months were Zero - please contact us." When people did call the person franchisees wanted to speak they were always passed the call to some very junior person.
The fact that the franchisee had to make a call with zero fees after months says a lot! The franchisor was happy with zero fees - they still get their management fees either way.
I must admit I was naive not to spot all this and it was also my failing for signing on. I just do not want anyone to go through what I went through. I had to remortgage my property. I am still paying the crooks.
Thanks C_D for pointing out the thread. As C_D says be very, very, very careful.
If you can, please try it do it on your own, it is so much satisfying. It will be lonely, hard work and you will feel isolated. You can use AW as source of advice/help. After 2 years or so you will really pleased with yourself. You will learn so much more. One thing is certain you will make a lot of mistakes, you will feel like signing on with another franchise looking at their fee levels (I did) and if you are working currently you will feel like going back. If you are determined to make this a success and are open minded you will succeed.
If you do decide to join a franchise please follow the check list highlighted by C_D.
If you do join a frannchise, please post your experience on AW.
average net earning of franchisee
I am interested in joining an accountancy franchise as i find that it could be much easier to start off being accompanied instead of doing it alone. I have the impression that growth may be faster because of the leads and the notoriority of an establised brand name. Am I right to think of things this way?
Can you tell me based on your experience what is the net amount a franchisee is expected to earn in a month given the fact that a franchisee is expected to starts off with a few leads?
Thanking you for your reply
Facts about franchises
People selling franchises are not in it to make money for you - they are in it to make money for themselves - and it's YOU that will make it for them.
Thanks for the link, quite useful as general business advice!
I was hoping to get a more specific information as to the pros and cons of buying a franchise from say Tax Assist Axccountants, or Certax Accounting or Accounts Assist etc. Are they all to be avoided?
Thanks for your sharing your experience. I was actually shocked to read about it!
One automatically assumes that there would be no place for cowboys in the accountancy profession - being a respectable profession?? Can I ask which franchise you bought? Given your experience, would you buy any of the following franchises? Tax Assist Accountants? Accounting Express? Accounts Assist? and so on!
My email is: [email protected]
I would love to help you further, I am sorry I am not able to for legal reasons. I am sure you understand having been through a gruelling experience with a franchsior I just cannot take the risk, even through exchange of emails.
The checklist I am sure will help. My suggestion is that you call franchisees (the more the better) off he more established franchisors and go through the check list with them. It will not take you long to weed out the dodgy one(s).
Avoid calling any franchisees on their marketing material. They have been hand picked! They will not say a bad word.
Yes I did fall into the trap of thinking accountants are trustworthy. I learnt from hard experience when it comes to money dont trust anyone. Always do the due diligence really well.
I am sorry I am not able to name them.
Good luck with your search. Please post your decision on AW. I would love to know.
Thanks for your input. It's a pitty that you feel unable to name the franchisor in question?
If I end up buying a franchise, and go on to discover that it was a con afterall, resulting in financial losses to me, then I'd have every right to come on here saying: "I bought an XYX franchise, and ended up with financial losses"! There'd be nothing legally wrong with that!
Anyway, I wish you well, and hope you'll be able to move on to better things!
Warning - Joining a franchise can seriously damage your wealth.
I would love to help you further, I am sorry I am not able to for legal reasons.
Posted by FirstTab on Sun, 22/08/2010 - 15:58
I'll name them ............. ALL of them.
The whole franchise model is a con, just one step away from pyramid marketting, and it is totally unsuitable for application to professional services.
We have dealt with franchised accountants from time to time when we have taken over their long suffering clients. On every occasion the records we obtained from them were shoddy, poorly prepared, and obviously "done to a price" with their clients invariably either being over taxed, or, in a couple of cases, being left with huge tax bills that the franchise accountant hadn't even warned them about.
We are aware of more than one franchise "accountant" with no qualifications whatsoever, but, who claim to be "qualified" by virtue of being part of a franchise. Regulars on here will know that I have absolutely no problem with QBE's, but, I DO have a problem when they hide behind a franchise to give the false impression that they are qualified.
The franchise model may well work fine if your ambition in life is to sell beefburgers for some American outfit, but it is simply not suitable for professional services, and, in my opinion, there is no such thing as a good accountancy franchise.
My simple answer to accountancy franchises:
If you're qualified and experienced and have a lump sum.... invest it in systems, software and marketing, NOT in the pockets of franchisors.
Everything I've heard is that accounting franchises don't work for the franchisee.
If you've got the capital to do it, invest it yourself, not in someone else.
Franchises suit some people but not others. If you are thinking of buying a franchise look into it very carefully. A few things to consider are:
Cost - what could you get for the same money spent on setting up your own practice? How much of your turnover do you have to pay each month? Are there any other ongoing costs eg software.Suppliers - Do you have to use particular suppliers or are you free to pick and choose your own?Tie-in - how long are you tied in to the franchise - what happens if you want to leave? Are the clients yours or do they belong to the franchisor?Freedom - Do you have the freedom to make the business decisions you want or do you have to do everything their way? Are you happy to do that?Marketing - Can you do this yourself, do you need the support from a franchise or can you use someone else?Support - Would you feel more comfortable with the support of a franchise or can you get this support elsewhere?
We speak to franchisees who found the support of a franchise invaluable when they are starting out but then feel they get to a point where they are paying over a part of their turnover every month when they feel they could go it alone.
What ever you do, look into it carefully and make the right decision for you.
Whether it be accountants, web advertising, posh coffee shops or a whole host of others, I have yet to come across a franchise which does anything except make money for the franchisor and leave the franchisee with a big loss.
I must thank everyone for all your contributions above, which I found helpful.
I've concluded that the franchise business model is always skewed towards the interests of the franchisor, while the franchisee is left to take all the risks and do all the work. However, I think the most important issue seems to be the enormous costs, both initial and on going, one has to pay up for the privilege!! It's like buying a job, expensively.
I've decided to avoid buying a franchise, unless one comes along with real benefits, with a low cost, and on a short term agreement, say up to a year!
Great that you are not making the mistake that I made. The power of AW members!
World domination... Good luck to them
"World domination... Good luck to them"
They would do better to sort out their UK operation first. We have seen some appalling examples of shoddy work by their franchisee's.
A Franchisor's view
We have read with interest the growing debate and would like to highlight a few points regarding us, TaxAssist Accountants. Some key points regarding our Franchise are:
We were formed by an FCA qualified Accountant with the specific remit to service small business clients. Since then we have developed a network of 185 franchisees (who between them hold 289 relevant Tax & Accountancy qualifications and employ over 700 staff) who service over 34,000 clients and have £22million in Gross Recurring Fees. We also have 1 master operation in Ireland who in the past 12 months have developed a network of 6 franchisees with a further 3 franchisees commencing training this month.
It is very important to us that anyone who we award our franchise rights to fully understands our business model, are fully aware of what is involved in being a franchisee and have satisfied themselves that we deliver what we promise. To that end, after meeting with you on a Franchise Discovery Day, we are happy to share contact details of our entire network of franchisees and recommend you speak with as many as possible and meet with those local to you.
Likewise, after the initial meeting we supply a copy of the franchise Agreement and advise that you must have it reviewed by a franchise lawyer so that franchisees are fully aware of their (and our) obligations and are comfortable working within the business model.
We have an initial 5 week residential training programme covering accounts, tax, software, case studies, sales and marketing. Please note all accommodation and meals (including lunch!) are included – our franchises certainly don’t go hungry! The first two weeks of our training (accounts and tax) are delivered by BPP Professional Education trainers whilst the course content is developed by our dedicated FCA qualified Training Manager. Ongoing training, annual conferences, regional meetings and best practice forums are held throughout the year.
All franchisees, and their staff have direct access to our highly experienced and qualified helpdesk who hold a combination of FCA, CTA and ACCA qualifications and bring with them practice & industry experience.
All franchisees receive technical visits / audits from our own qualified team to ensure service standards and compliance are maintained. Our franchisees also receive visits from the Marketing & Business Development team to further support them in profitable business growth and we have developed our own profit tools to apply to each franchisee.
We ourselves are full members of the British Franchise Association (www.thebfa.org) and adhere to their code of ethics which includes us not making a profit from the Franchise Fee. Please note, the bfa now have two franchisees (one from Mail Boxes etc and the other from Signs Express) who now sit on their Board of Directors to protect franchisees’ interests and are now looking to engage franchisees as part of the membership.
We, the franchisor, have no other business concerns nor do we have a single client to our name, our only source of income is from the ongoing Management Service Fees from the network – if they don’t make money we don’t make money. As such we have a support centre with 25 employees and 3 executive directors who are all focused on developing a successful network. None of the support centre team, including the directors, are franchisees.
Clearly we can’t comment on all franchisors and accept that, like non franchised businesses in any given sector, there are good and some not so good. Likewise we accept that going the franchise route isn’t for everyone – if you have strong entrepreneurial skills and don’t want to operate within the constraints of a specific business model then franchising probably isn’t for you. If however you see the value in the brand (we are currently ranked 34th in the Accountancy Age Top 50 list) and the support services that we provide in return for the Management Service Fees then it could be for you.
Yes, we’re looking at taking our franchise to other international markets but only because we are satisfied that the UK network is operating profitably and that the network are happy. At our annual conference earlier this year we stood up and gave our commitment to the network that we would not take our eye off the UK market and that they would not suffer through any reduced service from us.
Franchise Recruitment Manager, TaxAssist Accountants
[email protected] / 01603 447 402
Nice to see a franchiser operation spamming "any answers".
If they are so sucessful I wonder why they dont pay to advertise instead, I'm sure AWeb would send them an invoice.
5 WHOLE weeks of training!
I have removed the advertising element of David's post and have left the rest because I do think it is of interest to hear from the franchisor and he does have a right to reply.
Hi Simon (and everyone else reading this)
We're not going to start debating every point raised here but we did just want to put our view forward as we have started to be named, until then we were happy to sit back.
As you will have read, it is an "initial 5 weeks training" with ongoing training provided as required along with a stringent CPD requirement to ensure all our franchisees knowledge is up to date.
The training point has been discussed previously and to see the thread, including our reply, have a look at http://www.accountingweb.co.uk/anyanswers/becoming-accountant-5-weeks.
I'm glad to see this franchisor was not allowed to misuse this entity for advertising and spin! Thanks.
Posted by david.paulson on Thu, 02/09/2010 - 10:34
Actially the first mention of your name is in your post.
We were of course mentioned in the article on us that First Tab posted.
"We have an initial 5 week residential training programme covering accounts, tax, software, case studies, sales and marketing".
I wish I'd known about these people 40 years ago when it took me the best part of 5 years to be let loose on the public.
Training and BFA Ethical Code
I would like to add my concern to the short period of training already been mentioned by others.It is misrepresentation that franchisees who are posing as "accountants"with just 5 weeks training. The last thing they would say in arranging and attending an appointment is I am posing myself as an accountant with 5 weeks training. Not only this, one of this week of was spent on marketing. I do not think the sign up rate would be impressive.
Face up to it Tax Assist yo and other franchsiors on this aspect highly unethical. To me it is very clear that the impression you would like your accountants to give is they are not any different to any other CCAB accountants.
Where does it say on your website to recurit clients that most of our franchiees are not be from an accountancy background and they do not have any accountancy qualifications. However we are pleased to say they have been through our 5 weeks training? I do not think any client with a reasonable common sense would take this risk.
Granted that your fees levels are impressive Tax Assist and I take off my hat to you on this aspect.
BFA eithcal code of conduct is not worth the value the paper it is printed. It just does not act. It rather gets it subs from franchiors, gives out awards and tell other mugs like me how profitable franchising is. Nice life being CEO of BFA, hardly much work for massive underseved rewards. It is all such a con.
I have met the three directors of Tax Assist, overall I think they are good reasonable people. It is the concept of accountancy franchise in my opinion it is based on a misrepresentation. It is intended to give an impression that these "accountants" have been through the same training and exams as CCAB accountants. This is what really concerns me.
I hope the countries that TaxAssist intendeds to expands into have much stricter regulations on this area compared to UK.
@ First Tab
I am slightly confused.
It appears you have had a very bad experience with franchising. I don't know if it was with Tax Assist or not.
Tax Assist's growth and the ability of its franchisees to generate fees appears very impressive. It is the kind of record that any accountant in practice would like to achieve. If I were starting out and Tax Assist was able to help me deliver impressive fees I think I might be quite pleased with the arrangement.
Is it the idea that non-accountants can achieve good fees that you do not like or is it the franchise concept per se, even when the franchisee is a bona fide accountant? If it's the latter, I don't quite understand why.
-- Kind regards Andy
Dishonest or incompetent ?
Posted by andypartridge on Fri, 03/09/2010 - 09:35
The former is quite frankly dishonest as these franchisees try to give the impression they are qualified when they are not, and in the examples we have encountered cannot even be described as QBE.
In the latter, if the franchisee is qualified I would have to wonder why he/she would want to tie themselves to a franchise and hand over a large chunk of everything they earned in return for "back up" that as a properly qualified accountant they should not need. Perhaps such accountants should seriously consider whether they are suited to running their own practice.
I don't wholly agree
I think Tax Assist and others are supporting franchisees in the running of an accountancy business, not in being an accountant. They have an undeniably strong brand and national presence and this can be a genuine advantage to the accountant who wants to work for themselves but might lack sales and marketing skills to make it happen. I think that is a perfectly valid reason to enter into such an agreement.
Like you, I am not comfortable with the idea that a non-accountant can be let loose on the public so easily, but it is perfectly legal. Anyone can call themselves an accountant. Unless we assume that all their clients are fools the service would seem to be of an acceptable level. If the service is poor the clients will vote with their feet and come to us.
In a specialist and non-specialist relationship (eg Doctor/patient) the client due to their lack of knowledge places a huge amount of trust on the specialist. It is this trust that is abused by these "accountants". Of course to the full advantage to the franchisee/franchiosr. This is the point that makes me very angry.
One of the key reasons these franchisee accountants have been sign on by clients is beacuse of the clients lack of knowledge of that the term accountant can mean any thing and you anyone can call themselves accountants. It is this lack of knowledge franchiosrs are abusing and they know this. They hide behind BFA ethical code of conduct that is not effectively monitored.
Yes it is legal but it is just to not right and ethical.
I have no issues with CCAB approved accountants working as a franchisee.
I was not a franchisee of TaxAssist.
Is it the 'unqualified argument' then?
Tell me if I am wrong but it seems your real concern is non-CCAB accountants working in practice as accountants. Certainly, a franchisor facilitates this, but it seems that this is really a 'should unqualifieds be able to call themselves accountants?' which is a very different debate.
I actually like the franchising concept. It gives people the opportunity to work in trades and professions that would otherwise not be open to them. The franchisor deserves a reward for that. Like in all walks of life there will be some good and some bad.
-- Kind regards Andy
Not an unqualified argument
The point I made is not about quailfied v unqualified debate. It is about the intentional impressession (misrepresenation) given. It is prefectly fine to operate as unqualified as long as client is fully informed.
Not quite sure what you mean.
Do you think the accountant should inform the prospect, as part of their marketing perhaps ;) , that they are not professionally qualified?! They don't have to in law so why should they in practice, if you'll pardon the pun.
I think if the client asks then the accountant should answer honestly, but in my experience there is an incredible amount of apathy in this area from clients and so they seldom ask.
Back to the subject. There will be failures in any type of business and there will be failures in franchises, both franchisor and franchisee. Awful as they must be for those concerned, they should not blind us from the fact that many do work and the liklihood of success if greater with them. At least that's what my reading of the subject tells me.
What is an accountant?
I think what we're talking about, then, is actually educating the public about what accountants are.
Elaine, who won the Progressive Practice competition here last month, has a website and a petition set up exactly for this purpose:
Not sure what else I can say
Andy I am not sure what else I can say to make it clearer.
My key point is the abuse of trust that I mentioned in my earlier post. I will now leave at this and accept that I cannot be clear in my communication with everyone.
Tell me if I am wrong but it seems your real concern is non-CCAB accountants working in practice as accountants.
Posted by andypartridge on Fri, 03/09/2010 - 13:52
I think you're slightly missing the point Andy. I have absolutely no problem with QBE's, there are some exceptional accountants amongst them the equal of and possibly better than many qualifieds.
Where I DO have a problem is with the "5 weeks training" and call yourself an accountant concept. The important part of being a QBE is surely the "E" - experience. To me that means years of experience & accumulated knowledge, not a 5 week course and a quick bedtime read of "Accountancy for Dummies".
The problem with franchises is that although the franchisee may have minimal knowledge and almost zero experience, the business model is designed to give the impression that they are highly skilled qualified professionals. Now to my way of thinking that is misrepresentation.
Let's face it you walk into your doctor's surgery and you assume that the GP seeing you is qualified - do you ever actually ask them if they are ? Of course not. And the public sees someone calling themselves an accountant, and part of a national organisation will "assume" they are qualified.
think what we're talking about, then, is actually educating the public about what accountants are.
Posted by Monsoon on Fri, 03/09/2010 - 15:28
That petition is all about restraint of trade and protectionism and I totally disagree with it.
Not missing the point C_D
I understand that point completely and said so in my earlier post.
But to make an assumption that it applies to all franchisees in all accountancy franchises is, I believe, false.
Franchises consist of qualified accountants lacking skills or confidence in certain areas, qualified by experience accountants similarly, individuals with an entrepreneurial spirit who recruit their own qualified or QBE to manage the practice. Few people would say that none of these should be running an accountancy business.
Anyone with no accountancy experience thinking they can be a credible accountant in 5 weeks or less is in for a rude awakening, but at least they have a support network to help them. Better that they operate within the framework of a franchise than be a loose cannon, I suggest.
To those that sneer at franchises I wonder if they really have the clients' interests at heart or their own pocket?
@ Monsoon. I took at look at it and didn't really like it either. Literature aimed at frightening clients can be counter-productive.
What is an...
To be honest I'm on the fence (I'm AAT, not chartered so I wouldn't like to inadvertently get in the firing line) but it seemed relevant to the discussion so thought I'd throw it in there.
I think informing the public that anyone can call themselves an accountant (unlike doctors, solicitors etc) is a good thing, explaining that there are qualifications and experience and franchises and whatnot...
Trouble is, it would fall to the CCAB bodies to promote this and they would likely do this with their own members at heart, I honesn't can't see a collaboration between the chartered, non-chartered and other (like ICPA) presenting a factual objective view.
I'm of the opinion that there are crap qualifieds (be that chartered or not), great unqualifieds, definitely vice versa, and every spectrum in between.
It's a nice idea in theory that Joe Public knows his choices, it's bloody hard to put into practice.
In my firm we recruit graduate trainees. In order to obtain a position the graduate has to have undertaken a relevant degree. There is no way these trainees have enough skills to be let lose on clients after just 5 weeks training ( and that is even taking into account that the trainee will have a degree in accountancy ).
Obviously there must be something wrong with our training and the degree content, perhaps the franchise companies should start offering degrees, with their fast track methods it should be possible to reduce a 3 year degree course down to a couple of weeks.
the word 'accountant ' should be protected by law
The term accountant should be protected in law to be used by only members from uk & eu based accounting bodies under Royal Charter.
Furthermore UK law should only recognise EU accounting organizations officially recoginised to carry out accounting activities by their resoective countries of origin and the term accountant should be legally protected in all EU countries.
In our network marketing we ask for introductions to those using the services of franchisee accountants. We can beat them on price and service. We are chartered accountants.
i have seen several comments about 5 weeks training. I'm 62, I have done years of it, it does not stop.
There is another problem i see in the comments of the franchisor. It seems franchisees have a pool of experts within the franchise set up with whom they may consult. If feel sorry for franchisees, they won't spot the matters upon which they need to consult!
So the letter i am drafting right now to a prospective client who has been with a franchisee accountant lists 8 points of princple that have been neglected that we will need to address.
Give it time fellow professionals, more and more of the country will experience the services of franchisee accountants for themselves and learn the value of their services.