How to be a successful franchisee

Leading consumer brands like Subway and McDonalds have set the global yardstick when it comes to Franchising, especially in the UK where hundreds of businesses have grown using this business model.

Franchising has become popular in all industries – from restaurants to supermarkets and ice cream parlours.

Franchising boasts a simplistic business model and this has transformed the way businesses expand, allowing first timers to try out their luck as entrepreneurs.

The process is low risk, as it basically involves a franchisor selling an initial business idea, along with numerous supporting materials and resources, to someone else – the franchisee. The franchisee’s opportunity is to set up an already established business but in a different geographical area. In this article, we will be exploring the process of franchising in order to understand why this is often a good choice for anyone wanting to start their own business.

What / When / How?

The most enticing aspect of franchising is that the risk factor is a lot lower than that which comes with starting a business from scratch. Franchisees pay a one off fee to the franchisor, which means that the exclusive right to operate the business in a defined territory is purchased. Aside from using the brand name, a franchisee has access to the training and support that comes with an already established business with proven techniques and processes.

The franchisor is expected to provide everything needed to succeed in exchange for the initial fee – this includes vehicles and equipment, stock, documentation, systems, software, operating procedures and new employee training.

Additionally, a franchisee would normally pay an on-going percentage of sales to the franchisor and a portion of that money is often collected, from all franchisees, and combined to use for marketing the brand across the entire franchise network.

…And then there was paperwork

Franchisees operate independently from the franchisor, hence they need to complete the financial and tax paperwork associated as with any business.

Regulations, paperwork and decisions come thick and fast when starting a franchise, and while this can be distracting, it is vital that aspects such as: business structure, forming a company, registering with HMRC/Companies House, VAT schemes, business insurances, business banking, remuneration structuring, tax planning, life cover and pensions are covered.

As soon as the business is up and running, it’s important to maintain control of tax and finances and stay on top of things like: payslips, tax and NI deductions, monthly payroll returns, directors’ loans, dividends, VAT returns, company returns, annual accounts, corporation tax and self-assessment returns. The finances of the business need to be monitored and managed and its tax affairs kept up to date with..

Efficiency is key

Business owners often feel like they can do everything themselves, but that idea quickly dissolves when they see the amount of paperwork that needs to be dealt with. The quickest and smartest way to get help is to have an accountancy solution that has the ability to deal with all the issues above safely and with minimum hassle, whilst providing up to date financial information and traditional support and advice – all at a reasonable cost.

So it’s probably safe to say that the best thing to do is to go digital! There are so many benefits to an online accountancy solution, the most important being that they offer a cost-effective and hassle-free way of helping franchisees in becoming more efficient. It only takes approximately 24 hours to set yourself up, meaning that you get instant access to a modern way of viewing your finances, with no fear of delays and no extra costs. Your accountant can submit all the necessary information in real time, and you will be able to see how much will be needed to be set aside for tax bills.

Accessing advice and support whenever it is needed is one of the beauties of technology. It makes life simpler and allows you to have full control of your life and business; yes, the two go hand in hand. The admin burden is removed and you, the franchisee, can focus on the more important aspects of your business, such as growing the brand, with the comfort of knowing the tax-man won’t come knocking on your door.

John Hoskin is a director of CleverAccounts.com, an online accountancy firm that seeks to simplify the task of business accountancy. Paying a fixed monthly fee, small businesses, limited companies, sole traders, freelancers and contractors have access to accountancy, business-set up and tax planning services, simple-to-use online bookkeeping, a 24/7 view of their figures and on-going tax advice.

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John Hoskin

John Hoskin initially trained and worked as an accountant and consultant at Deloitte for five years. He then spent the next 13 years working as a Financial Director in businesses across the transport, outsourcing and healthcare sectors and running his own accountancy practice, before founding CleverAccounts. John and his co-founder Chris Mollan, wanted to provide a service that used modern technology to give small businesses and self-employed individuals access to all the accountancy functions they needed but without the crippling costs of a larger firm and with better levels of service and greater simplicity and clarity that they often receive.

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John Hoskin initially trained and worked as an accountant and consultant at Deloitte for five years. He then spent the next 13 years working as a Financial Director in businesses across the transport, outsourcing and healthcare sectors and running his own accountancy practice, before founding CleverAccounts. John and his co-founder Chris Mollan, wanted to provide a service that used modern technology to give small businesses and self-employed individuals access to all the accountancy functions they needed but without the crippling costs of a larger firm and with better levels of service and greater simplicity and clarity that they often receive.