Franchisin

I'm in the process of getting my ACCA practising certificate and once received feel I will be ready to start my own practice.  I've no experience of practice work, having worked only in industry.  My initial thoughts on how to get over this hurdle was to find a mentor.  I've recently been chatting with someone else in a similar situation and they have said that franchising is the way to go as you'll not only have a number of people to call for help, they can help with your business plan and obviously you're buying into an established brand.  I've found a number of mentors who will help with business plans and I have the ACCA technical help line for more complicated questions.  My fear of franchises has always been that they are restrictive and expensive, however, I have not fully researched them.  Has anyone had any experience of franchising?  Is it something worth looking at?

Thanks.

Comments
Bob Harper's picture

An alternative franchise    1 thanks

Bob Harper | | Permalink

Have a look at Crunchers:

  • Fixed fee
  • Low cost
  • Flexible

There are some videos of a franchisee being interviewed that you may find interesting.

Bob

Co-founder of Crunchers Accounting Franchise

franchising    1 thanks

aaronlawrie | | Permalink

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Franchising    1 thanks

edinsport | | Permalink

I was in same position as you a few months ago and looked extensively at the leading franchises. I learned a great deal from attending their Discovery Days and talking to existing franchisees in their networks. Even if you ultimately decide against signing up, it's worth doing due diligence on them just for what you learn from the process.

I'd encourage you to engage with them.

  

Costly

vdeepan3 | | Permalink

Franchise is a good option, but  it's too expensive for a start up with no client base. I was in the same dilemma and decided to learn on my own. It's a tough task, but I am slowly getting there. Some CCH/Tolleys books were helpful and also accountingweb members are very helpful. 

There are some practices offer paid training. It would be a better idea to get few months paid training, works much cheaper than a franchise. 

 

Bob Harper's picture

Cost or investment?

Bob Harper | | Permalink

Not sure about the other franchises but I honestly think it is cheaper to join Crunchers than for someone to set up on their own.

Not just the upfront financial costs but medium and long-term with the knowledge of doing things the best way. This will save thousands in time, energy and money around marketing, sales, pricing, client management and operations.

But, remember you can't just buy a franchise. It's about joining and not everyone is suited.

Bob

Another view    2 thanks

david.paulson | | Permalink

Hi all

Just so you know before I throw my thoughts in the mix I'll let you know that I look after the franchise recruitment for TaxAssist Accountants (www.taxassist.net). That said I'm not going to use this as a platform to try and sell our franchise, if you want more info I'd be happy to send it over diretly.

Yes, there are many pros and cons for a franchise and it's not right for everyone. A couple of thoughts:

Investment (as Bob implies, look at this as an investment not cost) - yes, to get into a franchise there is an upfront fee and an ongoing monthly commitment, the fees vary from franchise to franchise but you should look at what is being provided in return and decide if it represents value for money. Likewise the ongoing fees, how much ongoing support is provided (business development, technical, field support, ongoing training / technical updates etc) and again does it represent good value for money.

Restrictions - they are there and will typically include territory, the type of clients you will work with, services provided, use of the brand, preferred software etc. This is something that you will have to be comfortable with but bear in mind that a business format franchise will have developed a business model that they can demonstrates works and that can be replicated elsewhere in the UK.

The big plus in my mind of a franchise is the training that they should provide in how to set up and manage a practice and of course helping you to grow a profitable business. Access to funding is another plus - NatWest/RBS, HSBC & Lloyds have franchise department and will lend up to 70% of the total investment including working capital - in the last three years over 50 new franchisees have joined us and all have received the funding they wanted at a time when the banks are supposedly not lending!

I think that Bob's final point is especially pertinent and franchisors (us included) turn prospective franchisees down each year as it is in no one's interest to simply "sell" franchises to anyone.  

As a final point I'd also suggest that the British Franchise Association (www.thebfa.org) would be a good reference point.

I hope that this helps, I'd be happy to discuss this at any time.

Best regards

David Paulson

Bob Harper's picture

100:1

Bob Harper | | Permalink

I have not been involved in franchising for as long as David and TaxAssist but my understanding of the ratio of live franchisees to leads is 1:100.

As for the BFA - I see them as a body for franchisors more than franchisees. Franchisees should do their research and decide if the franchise is right for them.

For my mind the key issue for franchisees is understanding that a franchise is their business so they have to drive it forward with time, energy and money. It is not a job. This mindset is the first we challenge and we often turn down applications.

I believe franchising will become more normal in the profession as the future will be based on communities sharing knowledge and resources. An example is AVN - although they are not a franchise AVN firms can do more/different things to non AVN firms.

Hats off to TaxAsist, a very successful franchise operation.We are more of Business Assist with added value input on a wide range of business issues as well as the tax.

Bob Harper

mr. mischief's picture

depends    1 thanks

mr. mischief | | Permalink

It depends on your level of experience and whether you have - or can develop - a clear vision for a practice with its own distictive identity which people will recognise and want to buy from.

My background was as an FD.  So in October 09 my clear vision was "I am the FD, you are the MD" and usually it's the commercial stuff which persuades clients to move to me, such as saving one client £10k a year in forex fees which had not occured to the previous accountant.

So it was a no-brainer for me to go sole practice and it's been very successful.  As one local insurance broker put it "You have a strong local brand."  It's miles cheaper than being part of a franchise.

Two big advantages all start-ups in all sectors have over every competitor:

1.  A zero cost base.

2.  Zero baggage.  You can "beauty parade" all possible systems and choose the very best one.  My local competition would freak out if they saw my filing space - 2 bookshelves for 120 clients.

I'd had enough of having someone else tell me how things had to be done.  I have no regrets at all about the choice I made.  That said, I am currently advising a client who is in the final stages of buying into a franchise and it is definitely the right step for her.

 

 

Bob Harper's picture

Interesting

Bob Harper | | Permalink

@Chris ( Mr Mischief) - I had a quick look at your profile, Website and see you blogging and tweeting and congratulations on your success.

For me it's not really about setting up the cheapest way. But, cheap requires a comparison and I'd suggest that working with a group of people would enable you to find better ways to do things. This would turn the franchise (membership) fee into an investment and make it cheaper than being on your own with the fees.

For example, sharing knowledge on pricing your services or being able to tap into a profit improvement programme for clients. No one person can have deep knowledge on everything and being part of franchise (club) can help you get more out of your business even after allowing for the fee (subscription).

Imagine 100-300 like you working together in a community sharing knowledge and resources.

Bob

Kent accountant's picture

Agree with Mr Mischief

Kent accountant | | Permalink

My background is similar to Mr Mischief's, I had 16 years in industry before deciding to go back into practice.

I initially set up my own business to provide part time FD consultancy work and noticed a lot of work passing me by as they didn't need an FD but did need an accountant with real business experience. After several months I decided to start my own practice.

Nine months on and the consultancy side is busier than ever and I also have 35 (ish) accountancy clients and I've just started to outsource some of the work. I don't advertise, I do have a website and am active on linkedin, twitter and other business forums all of which has gained me work.

The very best business generator though has been word of mouth referrals

So for me franchising wouldn't have been the right move, I did look at it though. My brand is quite distinctive and I wouldn't be able to sell another brand as well as I sell my own.

 

 

Bob Harper's picture

You are valuable but does it really work for you?

Bob Harper | | Permalink

@Kent Accountant - there is no right and wrong as such but it sounds like your (and maybe Mr Mischief's) business is totally reliant on you (him).

It could be argued that this strategy is a mistake as you can't scale it and the business capital value could be compromised.

You are selling you and I am sure that is very valuable for your clients, but how much value is there for you as a business owner? 

With Crunchers our aim is to take "you" out of the proposition so you can get others to do the work (including business advise) with the client.

Bob

Kent accountant's picture

Me, me, me    1 thanks

Kent accountant | | Permalink

Bob, in the first instance, yes the business is reliant on me. I am (and will continue to be) the first point of contact for clients with my 'team' doing the majority of the labour intensive work.

For most sole practitioners they are the focal point for most clients, however they don't do all of the work. There are plenty of successful practices who work on this model, indeed I have done subcontract work for one whose business grew to 1,000 clients and £750k fee income before he sold it.

Successful businesses evolve and develop from adapting to circumstances, rather than sticking rigidly to a pre planned model.

Is there business value? Yes most definitely, how well I can scale it depends on how well I build my team around me.

So as I started off saying in my first post, franchising and a pre-defined model will work for some, but not for me. I have a clear understanding of what I want to achieve and what I need to do to achieve it.

 

 

 

 

 

Payroll Franchise

FionaE | | Permalink

All, i have 14 years experience in financial services area, not in accounting side of it but on the systems side. With 3 kids i couldn't manage both work and family, so quit my job.i am thinking of starting a payroll processing firm - workin from home. i have seen few franchises saying they will provide training and i can open a accountancy firm. but am only part qualified accountant and don't want to do something in which i don't have complete knowledge. but regarding payroll, i thought, i can learn the processing methods. the question is - i saw one franchise certax where they say they will charge 7500 pounds and give training on payroll and also provide software. they also say they will give 15 leads - not clients.

is there any one here who had some experience with certax - particularily the payroll package. is it worth paying that money to them or are there any other ways where i can start my own payroll processing firm. Any thoughts would be great and any ideas - i will appreciate

Kent accountant's picture

Be careful

Kent accountant | | Permalink

@FionaE

How much are you thinking of charging for your payroll services?

Bear in mind that £2.50 - £3.50 per payslip is what you will be competing against.

Need a lot of those to pay for a £7k franchise.

A better alternative is to team up with local accountants who are looking to outsource their payroll clients. 

You can get payroll training and decent software for a lot less.

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