An accounting and tax franchise is an exciting opportunity for budding and eager entrepreneurs to start their own practices quickly. This is a great opportunity for those moderate risk takers who do not want to start it from scratch. Franchising does not eliminate but reduces risk to a great extent since it comes with a proven business model and established brand name. You can read more about the benefits of owning an accounting franchise here.
However, deciding to buy a franchise is huge commitment. Once you have made the decision to invest, conducting due diligence on your prospective franchisor is essential. You want to make sure that the brand you have chosen is the right fit for you. That is why it’s important to ask the right questions of your franchisor.
Here is a list of questions you should ask your next potential franchisor:
What areas of support will you provide and how much support will be offered?
The franchise system lets you work for yourself but not by yourself. The support provided is one of the main reasons why so many people chose to enter this industry. Most franchisors provide both marketing support and technical support. While you also will be marketing your services locally, the effect of the national marketing done by the franchisor will ultimately trickle down to your sales. The brand name will help you attract new clients. Hence, it is important to consider the kind of marketing activities a franchisor undertakes. A brand which diversifies its marketing budget via digital and offline avenues is advisable. It's also important to ask about the support they will provide with your local marketing.
What does your training program look like?
It is important for you to understand the franchisor’s processes and systems to be able to maximize your results. How long will the training take? Will it be virtual or offline? Does the training extend to your staff or you have to train them yourself?
Can I talk to your existing franchisees?
Talking to the existing franchisees will give you insights about the brand and their processes that otherwise might not be possible to generate. They will be one of the most credible sources of information. Hence, if a franchisor hesitates to let you talk to them, it raises red flags that you should not ignore.
What are the exit strategies if I want to sell my practice?
You should consider your long-term goals when buying a franchise. Consider how long you'd like to be a franchisee, and how you would like to exit. An accounting practice is a valuable asset for your future.
Do you give exclusive territory rights?
Since other franchisees in the system will also be giving out the same services as you, it is important that you get exclusive rights to the territory that you want to function in. The franchisor should have a system in place to make sure that no two franchisees are competng for each other’s business and clients.
Where will I see the value of the fees I am paying you?
One of the benefits that a franchisee receives from the franchising system is the brand name and the established business model. However, that will not be enough to justify all the ongoing fees that you will pay them. You should be aware of the exact programs and services that your franchisor offers to be able to generate full value for you.
Do I need to be a qualified accountant?
Since it is an accounting and tax franchise, it is only reasonable to ask this question. You’ll know if you fit into their requirements. Some franchisors allow non-qualified accountants as franchisees since they provide the training that would fill the gaps. Also, you can hire CPAs to service your clients, while you focus on running the business.
Investing in a franchise can be a nerve-racking process. The more information you arm yourself with at the research stage, the more prepared you will be as a franchise owner. You will be able to base your decision on facts and data.
You can visit our FAQs page to get answers to some of these questions and more.