Franchising: Pros and cons for practitioners

 

While it's a business model that has been around for a long time, accountants appear to be somewhat wary of franchising.

It’s understandable that practitioners may not want to feel they are losing their identity and autonomy under a franchise, but perhaps the franchise experience is different to how it’s perceived.

AccountingWEB blogger First Tab awoke a sleeping dragon when he brought the subject up in a recent blog.

Self-admittedly without much practice experience, First Tab weighed up the pros and cons of joining a TaxAssist franchise.

“I remain impressed with TaxAssist. I spoke to eight to 10 franchisees. All of them said their investment was worthwhile. It’s now crunch time - yes or no?” he asked.

AccountingWEB members were quick to raise their opinions of franchises, some of which David Paulson, senior manager at TaxAssist agreed...

Continued...

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Tax Assist    2 thanks

andy moore | | Permalink

To my knowledge, I think, there have been 3 Tax Assist  franchises set up then disappeared in our local area in the last decade or so - 2 even had 'High St premises'. They seemed to come, with a flurry of leaflet drops and a lot of telemarketing, and then go - over a couple of years or so without seeming to make any impact.  I am guessing for the 3 =  £90k for Tax Assist in up front fees just for our small postcode 'patch'... how many other failures are there? Based on say 200 patches with 3 failures each - is it really £18 million? Makes one think......

memyself-eye's picture

I started as a franchise

memyself-eye | | Permalink

For a practice working solely in the pub/club trade. The Franchisees did the stocktakes/VAT/bookkeeping in their own area, the Franchisor the annual accounts and tax calcs from head office. Each paid the other 10% of it's income. Franchiseess set their own feees, so did the franchisor.

While it did provide support and training and was genuine in its' desire to see franchisees succeed, it failed to recognise that publicans in midlands coal fields could not and would not pay the sort of fees that the cotswolds pubs would.I found it like going to Macdonalds and being asked "How rich are you as the burger costs more if you are wealthy!" 

It also failed to modernise its systems - still using hand written bookkeeping, and treated the franchisees like errant children when they dared to suggest for instance that computer spreadsheets might be a good idea.

Only 12 franchises were sold and most failed.

I got my money back  went my own way and moved away from pubs..

Kent accountant's picture

A lifetime of debt or frittered away savings/redundancy payment    4 thanks

Kent accountant | | Permalink

I struggle to see why a qualified accountant who is well organised, intelligent and has the get up and go to work for themselves would ever consider a franchise. Regardless of whether they have working in practice or not.

£30k+ to join, monthly payments, a % of all fees earned plus more - and that's all before you take a salary.

So assuming your potential franchisee has a family who need to be fed and clothed, a mortgage to be paid and a car. Then, realistically you're looking at a minimum of £60k needed on day one.

I started with zero and built from there as plenty of others on here have, I did look at a franchise but for me all I saw was a gravy train for others where I would be lining their pockets.

So, if you're an accountant who fits the profile of my opening sentence and are looking at starting out I would say read the numerous start up articles, blogs and threads on any answers and pick a route followed by others who have succeeded.

For your bank balance's sake don't choose a franchise.

On the other hand if you're looking at a change of career, are an accountant with zero personality and have £60k burning a hole in your pocket - go for it.

FirstTab's picture

Marketing, sales + more    1 thanks

FirstTab | | Permalink

What also needs to be looked is what is it you getting for your money with a successful franchisor.

1)excellent and proven business model

2) sound marketing and sales trainng

3) Strong brand that is getting increasing recognised

4) efficient practice management

5) exchange of ideas with the network

6) support from the franchisor

Being Qualified accountant does not mean a person can generate high fee levels. To me all it means is that I have passed some challenging exams and continue to meet ACCA' s regulatory requirements.

My training made me an excellent employee but not an excellent practice owner.

ACCA training really lacks the importance of marketing and sales.

In other words can a franchisor be considered to fill in the gap in skills? I think so. It does come at a price.

Apologies for typos etc using a mobile device.

efficiencycoach's picture

It all depends on who you are...    2 thanks

efficiencycoach | | Permalink

What every qualified accountant has in common with every other qualified accountant, is that they are a qualified accountant. 

Like any other profession, there are always going to be people who are far more suited to the technical side of running a practice, rather than having the ability to start and grow a practice from scratch. The marketing and putting in place processes and systems is not everyone's cup of tea. These people will benefit from a franchise. 

You can still be organised, intelligent, and have the 'get-up-and-go', but still struggle to build up your own practice. 

I use a profiling tool in my work, and I can tell from the results of the profile, who will be a successful franchisee and who will be a frustrated franchisee. 

Kent accountant's picture

So many better options    1 thanks

Kent accountant | | Permalink

@efficiencycoach - can't agree with most of your comments. A technically good accountant should employ someone to deal with the sales and marketing, there are far better and more cost effective solutions for this.

Why pay for the technical support when its not needed?

There are people for who accountancy franchises are the best options but not accountants. In my view accountants who opt for a franchise are amongst other things lazy, gulible, not suited to running their own practice and have more money than sense.

 

memyself-eye's picture

Just to be clear

memyself-eye | | Permalink

None of the franchises in my scenario were accountants. I decided to qualify after I became a franchisee (and much to the surprise of the franchisor) because the clients kept calling me 'their accountant' as I was the one who had regular contact with them, even though I only did the basic bookwork.

I'm not flying a flag for franchising I wouldn't touch it with a bargepole now.

Locutus's picture

My thoughts on FirstTabs's points    2 thanks

Locutus | | Permalink

FirstTab wrote:
What also needs to be looked is what is it you getting for your money with a successful franchisor. 1)excellent and proven business model 2) sound marketing and sales trainng 3) Strong brand that is getting increasing recognised 4) efficient practice management 5) exchange of ideas with the network 6) support from the franchisor Being Qualified accountant does not mean a person can generate high fee levels. To me all it means is that I have passed some challenging exams and continue to meet ACCA' s regulatory requirements. My training made me an excellent employee but not an excellent practice owner. ACCA training really lacks the importance of marketing and sales. In other words can a franchisor be considered to fill in the gap in skills? I think so. It does come at a price. Apologies for typos etc using a mobile device.

I know nothing about tha TaxAssist franchise, but my general view on all franchises is that the franchisor ALWAYS wins and the franchisee SOMETIMES wins.

1)excellent and proven business model

But not proven to succeed, as a few others have commented.

2) sound marketing and sales trainng

Yeah, but you can but buy loads of this if you are prepared to pay £30k to £60k.  For this money, you could go on umpteen marketing courses, develop your website, go to just about every networking event you can think of, carpet bomb your local area with mail shots / telesales calls and even hire a full time marketing person for a while.

3) Strong brand that is getting increasing recognised

Stronger than your brand or mine, but not really that strong.  I bet the average business person has never heard of it.

4) efficient practice management

But, really, how hard is it to manage a small office with one, two or three people?

5) exchange of ideas with the network

But there are plenty of places where you can share ideas for free (like accountingweb, accountants district societies) or various business networking places, that cost very little if anything.

6) support from the franchisor

Maybe, but it may not be as much support as you want or need.

"My training made me an excellent employee but not an excellent practice owner"

But if you run a franchise you will still have many of the same issues to deal with that a practice owner has to deal with.  Why not be a freelancer instead?  That's what I started doing when I went self employed and still do to a significant extent today.

"ACCA training really lacks the importance of marketing and sales."

Yes, but it is primarily a professional qualification that largely examines technical areas.  ACCA has never really been a general MBA sort of qualification.  Marketing and sales skills are totally irrelevant to the majority of members that will only ever work for someone else.

"In other words can a franchisor be considered to fill in the gap in skills? I think so. It does come at a price."

It might fill in a few gaps, but I doubt whether it is a magic wand.  People that would have succeeded by starting up their own practice will probably succeed with a franchise.  Those that struggle with one model would probably struggle with the other as well.

I suggest that you examine the areas that you feel you are weak at and try and address those head on, rather than trying to hide behind a franchise.

Good luck with whatever you do, though.

Blackpool

taxassist | | Permalink

andy moore wrote:

To my knowledge, I think, there have been 3 Tax Assist  franchises set up then disappeared in our local area in the last decade or so - 2 even had 'High St premises'. They seemed to come, with a flurry of leaflet drops and a lot of telemarketing, and then go - over a couple of years or so without seeming to make any impact.  I am guessing for the 3 =  £90k for Tax Assist in up front fees just for our small postcode 'patch'... how many other failures are there? Based on say 200 patches with 3 failures each - is it really £18 million? Makes one think......

Hi Andy, we've been very unfortunate in Blackpool and it makes sense that your perception of us would be that it doesn't work but we just haven't had the right person in that patch.  Our business does not rely on the franchise fee and most of this is spent in year one.   We wouldn't have a business at all if everywhere performed like we have in Blackpool.  We give everyone the same support and tools right across the UK, nothing differs and we are always available to the network.  We've won support awards beating stiff competition but there are no guarantees and we are clear at the start about this.  Everyone has to play their part for any franchise to work and work well.

Not sure what the £18m reference is, is that our fee bank? As it is higher than this and proven to Accountancy Age here - http://www.accountancyage.com/static/top50-this-year

Always alternatives

taxassist | | Permalink

Kent accountant wrote:

@efficiencycoach - can't agree with most of your comments. A technically good accountant should employ someone to deal with the sales and marketing, there are far better and more cost effective solutions for this.

Why pay for the technical support when its not needed?

There are people for who accountancy franchises are the best options but not accountants. In my view accountants who opt for a franchise are amongst other things lazy, gulible, not suited to running their own practice and have more money than sense.

 

Why is the technical support not needed?  Our technical support allows our network to specialise in any small business (sub £2m turnover) no matter what industry and we share best practice within the network.  

You are right, you can employ a sales and marketing person as an alternative but we pick up business from unique sources and relationships which you cannot get as a practice trading on your own.  We provide training to the accountant as running a small practice doesn't allow for someone to just do the accounts, you have to be client facing and conduct sales meetings.  We also train our franchisees' staff too and they have access to training which is subsidised which they wouldn't get working for an independent practice. 

Our franchisees are not lazy or guilable and they value the brand and the support we provide. 

A balanced view

taxassist | | Permalink

0103953 wrote:

FirstTab wrote:
What also needs to be looked is what is it you getting for your money with a successful franchisor. 1)excellent and proven business model 2) sound marketing and sales trainng 3) Strong brand that is getting increasing recognised 4) efficient practice management 5) exchange of ideas with the network 6) support from the franchisor Being Qualified accountant does not mean a person can generate high fee levels. To me all it means is that I have passed some challenging exams and continue to meet ACCA' s regulatory requirements. My training made me an excellent employee but not an excellent practice owner. ACCA training really lacks the importance of marketing and sales. In other words can a franchisor be considered to fill in the gap in skills? I think so. It does come at a price. Apologies for typos etc using a mobile device.

I know nothing about tha TaxAssist franchise, but my general view on all franchises is that the franchisor ALWAYS wins and the franchisee SOMETIMES wins.

1)excellent and proven business model

But not proven to succeed, as a few others have commented.

2) sound marketing and sales trainng

Yeah, but you can but buy loads of this if you are prepared to pay £30k to £60k.  For this money, you could go on umpteen marketing courses, develop your website, go to just about every networking event you can think of, carpet bomb your local area with mail shots / telesales calls and even hire a full time marketing person for a while.

3) Strong brand that is getting increasing recognised

Stronger than your brand or mine, but not really that strong.  I bet the average business person has never heard of it.

4) efficient practice management

But, really, how hard is it to manage a small office with one, two or three people?

5) exchange of ideas with the network

But there are plenty of places where you can share ideas for free (like accountingweb, accountants district societies) or various business networking places, that cost very little if anything.

6) support from the franchisor

Maybe, but it may not be as much support as you want or need.

"My training made me an excellent employee but not an excellent practice owner"

But if you run a franchise you will still have many of the same issues to deal with that a practice owner has to deal with.  Why not be a freelancer instead?  That's what I started doing when I went self employed and still do to a significant extent today.

"ACCA training really lacks the importance of marketing and sales."

Yes, but it is primarily a professional qualification that largely examines technical areas.  ACCA has never really been a general MBA sort of qualification.  Marketing and sales skills are totally irrelevant to the majority of members that will only ever work for someone else.

"In other words can a franchisor be considered to fill in the gap in skills? I think so. It does come at a price."

It might fill in a few gaps, but I doubt whether it is a magic wand.  People that would have succeeded by starting up their own practice will probably succeed with a franchise.  Those that struggle with one model would probably struggle with the other as well.

I suggest that you examine the areas that you feel you are weak at and try and address those head on, rather than trying to hide behind a franchise.

Good luck with whatever you do, though.

One of the few balanced views on here and provides good level headed responses. 

My only points to add are that our brand is strong and much of our new business references the name in online search queries for the leads we provide.  We also have national relationships that bring new business. The average business owner will have heard of us more often than not.  Our franchisees do not hide behind a franchise, quite the opposite!

ShirleyM's picture

New business?    3 thanks

ShirleyM | | Permalink

People drive past our office, see our signs, look us up on the internet, and then telephone to make an appointment. This costs me nothing, other than the one-off cost of the signage.

This points to it being the signage on the shopfronts that draws the business, in which case it would work whether it said TaxAssist, or some other practice name.

Lets be clear....Franshises    1 thanks

justsotax | | Permalink

exist for only one purpose to make money for the Franchisor.  Systems/support/training are all their to justify the high initial capital cost, but you don't get a ready made client base - no guarantee that you will make money - this is down to the Franchisee.  

 

It is definitely a help for some, but lets not lose sight of the cost 30k ish....that is no small amount to spend on training, marketing etc....which could be used to build up your own brand name etc.  I am sure there are plenty of businesses that would succeed with that sort of capital input (and a the respective 'shop front').   

bookmarklee's picture

Other options    2 thanks

bookmarklee | | Permalink

Last year I wrote a blog post: "8 tips if you are considering an accountancy franchise"

It offers an independent perspective and readers have added some useful comments at the end.

Coincidentally I have just read this piece on CheapAccounting.co.uk website: 

"Lancashire-based chartered accountant Jackie Stopyra was faced with the stark reality of decreasing client numbers and fees, which were severely affecting her traditional accountancy practice. 

She says she knew that she needed to do something, but admits to being unsure about what to do for the best. Jackie found out about CheapAccounting.co.uk and since launching the franchise's Preston office in September 2012, her fortunes have improved significantly."  More here>>>

Also found this list: 12 reasons to join us - which sets out a number of issues over and above those noted in the article and comments above.

The bottom line is that a franchise opportunity is not for everyone and that different franchise opportunities will suit some people better than others.

@KentAccountant is entitled to his view but I don't share his negative view of accountants who choose to operate as part of a franchise. On the contrary I have more concerns about accountants who may be great at providing high quality service but who have tried to run their own practice alone and without the requisite skills and experience.

Mark

Kent accountant's picture

Read properly don't skim!!!!    2 thanks

Kent accountant | | Permalink

taxassist wrote:

Kent accountant wrote:

@efficiencycoach - can't agree with most of your comments. A technically good accountant should employ someone to deal with the sales and marketing, there are far better and more cost effective solutions for this.

Why pay for the technical support when its not needed?

There are people for who accountancy franchises are the best options but not accountants. In my view accountants who opt for a franchise are amongst other things lazy, gulible, not suited to running their own practice and have more money than sense.

 

Why is the technical support not needed?  Our technical support allows our network to specialise in any small business (sub £2m turnover) no matter what industry and we share best practice within the network.  

You are right, you can employ a sales and marketing person as an alternative but we pick up business from unique sources and relationships which you cannot get as a practice trading on your own.  We provide training to the accountant as running a small practice doesn't allow for someone to just do the accounts, you have to be client facing and conduct sales meetings.  We also train our franchisees' staff too and they have access to training which is subsidised which they wouldn't get working for an independent practice. 

Our franchisees are not lazy or guilable and they value the brand and the support we provide. 

 

Technical support - efficiencycoach commented on technically capable accountants who may consider a franchise (which includes technical support). My point was why pay for technical support when its not needed - especially with a £30k+ club signing on fee.

Specialise in small businesses - more sales bullsh*t here - how often does an accountant (dealing with small businesses) need expert advice from an accountant/expert who specialises in a specific industry?

I'll answer that for you - HARDLY EVER!!!!  There's something called google, another thing called AWeb, another called Bloomsbury Professional and if I'm still stuck (haven't been yet) ICAEW referral scheme at £25 a go. 

Bit cheaper than the £30k+ crazy gang eh?

'Our franchisees are not lazy or guilible and they value the brand and the support we provide.'

Please quote properly or not at all, I referred specifically to ACCOUNTANTS!! and why did you not comment on:

'not suited to running their own practice and have more money than sense'

Bit too close to home?

 

petersaxton's picture

FT makes a case for TaxAssist    2 thanks

petersaxton | | Permalink

FTs case gives the impression that he thinks he would be better off signing up with TaxAssist.

Yes, he chooses not to. He says it's "personal circumstances" but I can't think of many personal circumstances in which he would remain in business but not join something that seems as advantageous as he makes out.

Confused?

Maybe FT can explain.

Kent accountant's picture

You're right Mark    4 thanks

Kent accountant | | Permalink

bookmarklee wrote:

@KentAccountant is entitled to his view but I don't share his negative view of accountants who choose to operate as part of a franchise. On the contrary I have more concerns about accountants who may be great at providing high quality service but who have tried to run their own practice alone and without the requisite skills and experience.

Mark

I am.

Thanks for yet another link(s) to yet another one of your articles :)

petersaxton's picture

Not for everyone    4 thanks

petersaxton | | Permalink

I see a lot of people saying that franchises are "not for everyone". It would appear to me that they are not for 99% of accountants. I think franchises make plenty of money out of people who sign up whether it is for them or not for them.

ShirleyM's picture

If an area doesn't 'work' ...    2 thanks

ShirleyM | | Permalink

... do TAA reject applications for that area?

I was curious about Blackpool, where TAA didn't have the 'right' franchisees to make a go of it (more than once!) I was curious about future potential franchisees. Would you tell them that franchisees have tried that area before, and failed? Would you refund some of their money, or reduce the initial investment, or did the franchisees lose all of their initial investment, ie. the franchise fee, plus the large cost of opening a shopfront?

FirstTab's picture

PERSONAL    1 thanks

FirstTab | | Permalink

No will not explain. I said it is personal and it is.

Peter you are obsessed with my affairs. Before it was about my decision on TAA.

Stop this continuous hounding. I am not worth your time.

petersaxton's picture

Over reaction?    1 thanks

petersaxton | | Permalink

I'm not "obsessed with your affairs" or "continuously hounding you".

It just seems very strange that you put so much effort into considering a TaxAssist franchise and you said you were very impressed yet you ended up not proceeding. It reminds me of your views of AVN and shop fronts.

I'm quite willing to draw my own conclusions from the available evidence the same as most other people will.

FirstTab's picture

YES

FirstTab | | Permalink

Draw your own conclusions and please move on.

It is an obsession.

Calm down    1 thanks

taxassist | | Permalink

Kent accountant wrote:

taxassist wrote:

Kent accountant wrote:

@efficiencycoach - can't agree with most of your comments. A technically good accountant should employ someone to deal with the sales and marketing, there are far better and more cost effective solutions for this.

Why pay for the technical support when its not needed?

There are people for who accountancy franchises are the best options but not accountants. In my view accountants who opt for a franchise are amongst other things lazy, gulible, not suited to running their own practice and have more money than sense.

 

Why is the technical support not needed?  Our technical support allows our network to specialise in any small business (sub £2m turnover) no matter what industry and we share best practice within the network.  

You are right, you can employ a sales and marketing person as an alternative but we pick up business from unique sources and relationships which you cannot get as a practice trading on your own.  We provide training to the accountant as running a small practice doesn't allow for someone to just do the accounts, you have to be client facing and conduct sales meetings.  We also train our franchisees' staff too and they have access to training which is subsidised which they wouldn't get working for an independent practice. 

Our franchisees are not lazy or guilable and they value the brand and the support we provide. 

 

Technical support - efficiencycoach commented on technically capable accountants who may consider a franchise (which includes technical support). My point was why pay for technical support when its not needed - especially with a £30k+ club signing on fee.

Specialise in small businesses - more sales bullsh*t here - how often does an accountant (dealing with small businesses) need expert advice from an accountant/expert who specialises in a specific industry?

I'll answer that for you - HARDLY EVER!!!!  There's something called google, another thing called AWeb, another called Bloomsbury Professional and if I'm still stuck (haven't been yet) ICAEW referral scheme at £25 a go. 

Bit cheaper than the £30k+ crazy gang eh?

'Our franchisees are not lazy or guilible and they value the brand and the support we provide.'

Please quote properly or not at all, I referred specifically to ACCOUNTANTS!! and why did you not comment on:

'not suited to running their own practice and have more money than sense'

Bit too close to home?

 

Our franchisees don't have a business if they aren't suited to run their own practice. We can't do that part for them.  Our franchisees also don't have more money than sense. 

No skim reading whatsoever, all of our franchisees use our technical support because there is always a scenario you haven't come across before and our franchisees need to get an answer quickly rather than post on a forum and wait for advice.  That's what they value and pay for among many other things.

I don't think there is a need to swear on here, it's a discussion that doesn't need to be as heated as it is.

Nothing wrong with the area

taxassist | | Permalink

ShirleyM wrote:

... do TAA reject applications for that area?

I was curious about Blackpool, where TAA didn't have the 'right' franchisees to make a go of it (more than once!) I was curious about future potential franchisees. Would you tell them that franchisees have tried that area before, and failed? Would you refund some of their money, or reduce the initial investment, or did the franchisees lose all of their initial investment, ie. the franchise fee, plus the large cost of opening a shopfront?

We always talk to franchisees where there has been a previous franchisee in the area on a Discovery Day here in Norwich.  We are very open and honest and explain to people what happened and why (but cannot do that online here).  Nothing wrong with the area, should be plenty of B&B's and other businesses in Blackpool. 

ShirleyM's picture

Thank you for answering part of my query    1 thanks

ShirleyM | | Permalink

taxassist wrote:

We always talk to franchisees where there has been a previous franchisee in the area on a Discovery Day here in Norwich.  We are very open and honest and explain to people what happened and why (but cannot do that online here).  Nothing wrong with the area, should be plenty of B&B's and other businesses in Blackpool. 

I guess from your response that you would require the full fees, and the failure is financed by the franchisee(s).

papalazarou's picture

Good point ShirleyM    1 thanks

papalazarou | | Permalink

ShirleyM wrote:

People drive past our office, see our signs, look us up on the internet, and then telephone to make an appointment. This costs me nothing, other than the one-off cost of the signage.

This points to it being the signage on the shopfronts that draws the business, in which case it would work whether it said TaxAssist, or some other practice name.

I think this is a very good point. A well designed/strong sign/shop front along with well structured marketing campaign would pay dividends without having to pay a large franchise fee. Although you would not get the start up/ongoing support which I do think would save a lot of time for someone starting up. Where else could I get this support? I do not like to ask questions on AnyAnswers for fear of getting the 'you should not be in practice etc' response.

I am still undecided whether a franchise would be good for my circumstances but after a close relative said at the weekend what have you got to lose by trying without the franchise first? Start up costs of around £2k but not much more financially really.

I was thinking of starting a blog as someone starting completely fresh to practice so that I did not bombard the Anyanswers board and other members could post comments/experiences-good idea or on a hiding to nothing?

ShirleyM's picture

@papalazarou    1 thanks

ShirleyM | | Permalink

If I were starting again, I would be quite honest about my existing skills and weaknesses. It's no good kidding yourself you're good (or could be good) if you're not.

Once you have identified your strengths and weaknesses, look at how you can play to your strengths, and look at how you can overcome your weaknesses. This may mean specific training, or it may mean hiring a specialist.

I think there are others that provide franchise type support at much lower cost. I think Jason Dormer is one, and there may be others. I haven't used them so cannot vouch for their effectiveness, but maybe someone on AWeb has actual experience.

Finally, everybody has to start somewhere, and most responses on AWeb are polite ... but we all get out the wrong side of the bed sometimes. Don't take it to heart and allow the occasional bad & moody response stop you from posting questions.

Yes, there is nothing wrong with the area

taxassist | | Permalink

ShirleyM wrote:

taxassist wrote:

We always talk to franchisees where there has been a previous franchisee in the area on a Discovery Day here in Norwich.  We are very open and honest and explain to people what happened and why (but cannot do that online here).  Nothing wrong with the area, should be plenty of B&B's and other businesses in Blackpool. 

I guess from your response that you would require the full fees, and the failure is financed by the franchisee(s).

We once had a franchisee blame an area (I won't say where) who said it couldn't be done because the area was a commuter belt and no businesses existed there.  That person decided to leave the network and the new person joined us and grew a substantial business there and recently sold it to a new franchisee coming in who has already progressed the practice even further. 

We provide the same support and training to each franchisee.  They ultimately run their own business and those that follow the model succeed.  I can't comment on specifics for Blackpool but it has small businesses just like any other part of the UK.  We go out of our way to help our franchisees (and have won awards for this) but if someone doesn't respond to this then how can we force them? We can't, that's not the model and everyone knows this when they join.  Both parties must play their part for it to work.  The quality of franchisees in the network has vastly improved over the last ten years and the changes in our support during this time have gone from finding clients to helping managing the clients, finding the right staff and making the practice profitable. 

We are looking for accountants who could probably do this on their own but see the value of joining a successful business model.  We can't sign clients for them but we can get them appointments and train them how to sign clients up.  We've never said anything different to this and it is clear on our website and anyone who has attended a Discovery Day will also know this. 

ShirleyM's picture

Interesting, but that raises another question    2 thanks

ShirleyM | | Permalink

taxassist wrote:

We once had a franchisee blame an area (I won't say where) who said it couldn't be done because the area was a commuter belt and no businesses existed there.  That person decided to leave the network and the new person joined us and grew a substantial business there and recently sold it to a new franchisee coming in who has already progressed the practice even further. 

I wonder why the Blackpool franchisees didn't take the option of selling on. Couldn't they find a buyer?

elainec100's picture

papalazarou

elainec100 | | Permalink

papalazarou wrote:

 

I am still undecided whether a franchise would be good for my circumstances but after a close relative said at the weekend what have you got to lose by trying without the franchise first? Start up costs of around £2k but not much more financially really.

 

Giving it a go on your own is a very valid approach – may I suggest that you set a robust plan with realistic client acquisition targets. This will help you to stay focussed and measure if your approach is being successful. Good luck

petersaxton's picture

My view    1 thanks

petersaxton | | Permalink

"Although you would not get the start up/ongoing support which I do think would save a lot of time for someone starting up. Where else could I get this support?"

There's plenty of places. Have a look at AccountingWebs startup guide or do a search in AnyAnswers.

"I do not like to ask questions on AnyAnswers for fear of getting the 'you should not be in practice etc' response."

Your business should be more important to you than being put off by these comments. Get a think skin and ask questions!

"I was thinking of starting a blog as someone starting completely fresh to practice so that I did not bombard the Anyanswers board and other members could post comments/experiences-good idea or on a hiding to nothing?"

Sounds a great idea.

The £18m reference - say, 200

andy moore | | Permalink

The £18m reference - say, 200 franchise areas in UK each with 3 'start ups' each over the years at £30,000 franchise fee each time = £18m

efficiencycoach's picture

Very strong words!    2 thanks

efficiencycoach | | Permalink

To @Kent Accountant

Your words (and I quote, with the whole paragraph):

"There are people for who accountancy franchises are the best options but not accountants. In my view accountants who opt for a franchise are amongst other things lazy, gulible, not suited to running their own practice and have more money than sense."

were perhaps written in the heat of the moment?

In case you are wondering I am not particularly pro or anti an accountancy franchise. It all depends on the accountant concerned. To be fair it often works in our favour if an accountant doesn't opt to buy a franchise as they are more likely to work with myself or my business partner.

I'm not sure I'd label any accountant who opted for a franchise as lazy, gullible, not suited to running their own practice and have more money than sense. (Your words not mine) Not everyone is built the same way as you, even though they may share similar technical qualifications. 

 

petersaxton's picture

Kent Accountant    3 thanks

petersaxton | | Permalink

He's been exceptional at marketing and very soon he's going to have to make a decision about how he can harness his marketing skills as he picks up more clients. Will he take on staff or will he increase his fees? Some of what he says may seem like he's saying things in the heat of the moment but I have met him and he's a very sensible grounded individual.

I would say that accounting franchises are in it to make money similarly to accountants. The difference is that a franchise takes a massive amount of money from an accountant for services that could be bought cheaper for a better quality elsewhere. Clients of an accountant don't have to be tied into onerous contracts so they can leave their chosen accountant at any time. The same cannot be said of a franchise.

My experience    2 thanks

winton50 | | Permalink

I looked at franchises a couple of years ago. The price quoted was £30k for a full package but I eventually decided not to go ahead.

Essentially I did what I'd advise any client to do with a potential business venture. I weighed up the pros and cons as dispassionately as I could,gathered as much evidence as I could find, spoke to a lot of people and then made my decision.

The pros - complete and ready to go. all branding in place, tried and tested formula, existing franchisees to talk to, technical back up, software in place, marketing help.

The cons - they wanted their fees on clients I already had, I had to do as I was told, they essentially expected m to be a networking machine after day 30, quite high residual fees, having to pay for any ongoing marketing effort.

When I looked at what £30k would buy me I realised that actually I could brand it myself, print my own stationery, pay someone to do my marketing and keep all of the fees. The software turned out to be commercially available SAAS for a lower price than they wanted to charge. The final straw was that when I went on a 'discovery day' with 7 other potentials I was the only person with any qualifications and only one other had actually done any books commercially. Doing them for a mate is not IMHO the same.

My feeling is that if you want to essentially do 'self employment lite' and have little or no experience and are not qualified then franchising could well be a way in. You need to be happy with networking and self promotion and you need to toe the line. If you are fine with this then you could well make decent income from a franchise but if you are a half decent accountant or have run a business before then you could find better value elsewhere.

 

Fair play though to the Tax Assist guy for coming on and providing answers. I think searching questions to him are valid but I don't feel that the aggressive nature of some peoples posts is warranted, after all it just makes people defensive and obscures the real issues doesn't it?

Kent accountant's picture

@efficiencycoach

Kent accountant | | Permalink

Designed to provoke a comment and yes I do think accountants who opt for a franchise where your cash outlay is £60k+ fall into one of those categories and several more.

In my opinion there are far better and more cost effective ways to start an accountancy practice.

@winton50 - I agree with your far more reserved and pragmatic comments about who may be suited to a franchise. 

@Peter - thanks for the comments and good ideas for how an accountant should look to start a practice.

Anyway this is getting boring now and I've said my piece so I'll sign off.

 

Cheaper alternatives    1 thanks

taxassist | | Permalink

There are always cheaper alternatives and you have to decide what's right for you.  Franchising isn't for everyone but it's working well for our network. 

We've spoken to our accounting software provider and have had it confirmed in writing that you cannot get the same accounting package as we provide the network if you go directly to them.  CCH offer a very comprehensive accounting package and is not SAAS so perhaps this has been confused with Kashflow bookkeeping software which is SAAS. 

A successful franchise works well when everyone follows the model but our franchisees still run their own business and have a great deal of freedom in choosing how to run their practice.  We ask them to use CCH, the branding must be right and they must accept inbound leads if there is business in their area.  Other than that we all work together and we listen to our network to see what they need to help their clients.  Everything is client focused because clients are the heart of our business.

If people don't follow the model then we move away from being a collective of accountants and lose our strength and identity so we do give our franchisees very good reasons to follow our lead.  We haven't let them down and they trust us.

@ShirleyM - I can't answer your question without going into personal detail of those that were in our network.

@andymoore - Thanks for the clarity.  Would you say there is plenty of small business in Blackpool?

 

petersaxton's picture

Franchising is for the franchisor in the majority of cases    4 thanks

petersaxton | | Permalink

 

“Franchising isn't for everyone but it's working well for our network.”

You keep saying that but your claims are pretty average and certainly don’t warrant the large expenditure required.

“We ask them to use CCH”

Why? CCH are widely thought to be inferior to several other software packages for accountants. Do you receive any financial incentives to recommend the software?

“the branding must be right and they must accept inbound leads if there is business in their area.”

Is the following true?: The franchisees have to pay for that branding yet you charge the franchisees for any enquires that you receive? The only contribution you make towards generating these calls are the website and taking the phone calls and the franchisees have to pay for that expense.

“We haven't let them down and they trust us.”

How can you say that when the other thread has ex-franchisees who say the exact opposite. One said you over promised and under delivered.

“@ShirleyM - I can't answer your question without going into personal detail of those that were in our network.”

That sounds like you are making out it was the franchisees’ faults and not yours.

Quality    1 thanks

The Black Knight | | Permalink

Quality would be an issue for me and the franchise brand means that even if you are a competent accountant you are tarred with the same reputation.

I have seen some quite appalling work from Tax Assist and Aims

The success of a franchise depends on anyone being to run the business having had no previous experience. Whilst these franchisors believe in this, it cannot really work with Accountancy can it?

The subject area requires a brain.

Added to which the numbers don't really add up when looking at these deals which would filter most accountants out of the equation would it not?

Old Greying Accountant's picture

If you can't build your own business ...    1 thanks

Old Greying Acc... | | Permalink

... how can you help others with theirs.

If you want to work to someone elses agenda and checklists I would summise employment/sub-contracting is a better option for an accountant.

Franchises

paulinerowley | | Permalink

We are about to enter our 20th year as a "franchise". As part of Aims we technically run under licence and not franchise but its the same animal in the dark. Has it been worth it? Definitely. Would I do it again? Yes. Are there draw backs? Yes but then there are drawbacks to being a small sole practictioner too. My main gripe is that at the point where you want to sell your practice not enough thought (or law) goes into protecting the positions of either party or providing the necessary finace to do it and it usually seems to result in the practice being "broken up" which is not really the best solution. Its not suitable for everyone but then not everyone can run their own business anyway!

petersaxton's picture

One example    1 thanks

petersaxton | | Permalink

I took over from a TaxAssist accountant and although I was provided with a set of company accounts, tax return and tax computations the company accounts didn't include any tax or share capital!

Always, believing there's two sides to every story, I phoned the TaxAssist accountant and raised my concerns. She explained that she didn't have time to get all the information before the submission deadline. I would have moved back the ARD by one day and asked HMRC for more time as the Companies House deadline has been extended. I don't think the TaxAssist accountant was aware of the possibilities.

TaxAsssit    1 thanks

terry sweeting | | Permalink

They have been "unfortunate" in more places than Blackpool!!!  It is unfair to say that they have not had the right person in that "patch".  2 of the 3 ex franchisees are still practicing successfully without the burden of franchisor fees & restrictions.

TaxAssist franchise    2 thanks

Doug Clanchy | | Permalink

I am a TaxAssist franchisee and a strong advocate of the franchise.  I am a qualified accountant (ACCA) with many years experience at senior level in the commercial world, including with motor manufacturers and dealers.  My game plan was always to move into practice and I started my own practice five years ago.  An opportunity came up two years ago to join the TaxAssist franchise, and after a deal of research I came to the conclusion that it represented good value.  It released me from much of the administration associated with running a practice, in order to concentrate on developing the business.  My background gives me a great deal of experience with franchising, marketing and business planning.  After two years with TaxAssist I am confident that it was a good decision.  I can compare the quality of the franchise offer wth that of the likes of Ford, General Motors, and many others in motor retailing and in my view TaxAssist is among the best as a franchisor.  I did look at various other accountancy franchises and I would have to admit that none of them were able to demonstrate to me that they would add sufficient value, but that's just my opinion.  With any franchise you have to accept the whole package if it is to work for you, and there are plenty of practices which are very successful with a different model.  Those franchisees who adopt the TaxAssist model are generally successful, but as with any business model it is ultimately down to the individual to make it work for them.  The team at TaxAssist are very professional, innovative and provide high quality technical support.  The franchise fee goes into the initial training and support, and the franchisor earns a fair profit from the work they do.  Their high quality support is continuous, it does not stop ater the initial training period  The principles behind the franchise are not so very different from the larger accountancy partnerships.  In conclusion, I would have to disagree with many of the negative comments but would totally agree that there are many successful practices which have followed a different route.

ACCA    1 thanks

The Black Knight | | Permalink

Quote:

 

"ACCA training really lacks the importance of marketing and sales."

Yes, but it is primarily a professional qualification that largely examines technical areas.  ACCA has never really been a general MBA sort of qualification.  Marketing and sales skills are totally irrelevant to the majority of members that will only ever work for someone else.

Where did that one come from.

There used to be rules about marketing a professional practice which is why firms do not have an in your face sell it and run style.

Buying from a professional is about building a relationship not selling a tin of beans.

Anyway ACCA members will have set a paper in their finals entitled Strategic Business Planning and Development and those that have practising certificates will have practical experience of sales and marketing.

I Do love the way these new style Guru's reinvent the wheel and expect us all to be surprised at what they have discovered and need to impart to us.

Based on the knowledge they have not seen us selling the bleeding obvious like hot cakes.

Selling is not difficult. You can sell any old crap to an idiot for a cheap price.

Providing a quality professional service, getting others to see that and getting paid what you are worth? Now that is different and much depends on what level your customer can understand.

 

DMGbus's picture

Bad for clients (but they don't realise it)

DMGbus | | Permalink

I have limited experience of Tax / Accounts Franchises, however the one client I gained from a local tax franchise had the following features:

First period of accounts - about 15 months long.

Accounts and SA103 included 15 months takings but only 12 months expenditure.

Fee charged to client seemed low at £250+VAT.

Books came back from the franchise in a franchise-branded carrier bag which looked very professional (*).

I re-did the accounts and obtained a tax refund for the client.

(*) This is what some franchises are primarily about - looking good with marketing, with regrettably quality control being secondary in some instances.  

I forget the name of the franchise, but it was well known at the time (in terms of market awareness / nationally known) and was run by a qualified ACA or FCA.    It had a high street "shop" the costs of which combined with franchise fees to head office and low fees to clients must have put the pressure on to get output of accounts / tax returns skipping the costs of adequate review (adequate review is only possible with extensive practice experience).

petersaxton's picture

Doug

petersaxton | | Permalink

Do you not think you would have been successful without joining a franchise?

I know some accountants start in practice and THEN wonder where they are going to get clients from but I would have thought the vast majority would have a plan to pursue one or more of the various ways of growing and finding clients. I wouldn't have thought the admin would be that big a  deal? What admin do TaxAssist do for you? Wouldn't it be cheaper and more effective to get your own admin person?

Looking at the services that TaxAssist provide you how much would they have cost if you had bought them in independently?

Old Greying Accountant's picture

Ah, those were the days ...

Old Greying Acc... | | Permalink

... one guy I know got the edge for a year or two because he was the first to have bold print in the telephone directory - that was about as far as you were allowed to go to advertise back then!

We did not write this

taxassist | | Permalink

The Black Knight wrote:

taxassist wrote:

 

"ACCA training really lacks the importance of marketing and sales."

Yes, but it is primarily a professional qualification that largely examines technical areas.  ACCA has never really been a general MBA sort of qualification.  Marketing and sales skills are totally irrelevant to the majority of members that will only ever work for someone else.

Where did that one come from.

There used to be rules about marketing a professional practice which is why firms do not have an in your face sell it and run style.

Buying from a professional is about building a relationship not selling a tin of beans.

Anyway ACCA members will have set a paper in their finals entitled Strategic Business Planning and Development and those that have practising certificates will have practical experience of sales and marketing.

I Do love the way these new style Guru's reinvent the wheel and expect us all to be surprised at what they have discovered and need to impart to us.

Based on the knowledge they have not seen us selling the bleeding obvious like hot cakes.

Selling is not difficult. You can sell any old crap to an idiot for a cheap price.

Providing a quality professional service, getting others to see that and getting paid what you are worth? Now that is different and much depends on what level your customer can understand.

 

Why have you quoted us here?  We didn't write this.  We stated the post as a whole was balanced but you've quoted us here. 

Sign of the times?

The Black Knight | | Permalink

Old Greying Accountant wrote:

... one guy I know got the edge for a year or two because he was the first to have bold print in the telephone directory - that was about as far as you were allowed to go to advertise back then!

There were rules about the size of an advert, it was quite small and any larger would have brought the profession into disrepute.

Can you imagine the horror at anything as obscene as a tax assist shop front?

"Small business does not need big accountants"

NO

but it does need ones that know what they are doing!

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