What Franchises Need From an Accountant Keep this checklist in mind as you find someone to manage your books.
By Hayden Field •
1. Stress Your Unique Needs
From Frank Leggio, audit & assurance partner, Deloitte & Touche
You need a firm that can support your specific operation and structure. It must understand the franchise model and have experience with multi-state, multi-region, or even global growth models. As you talk with firms, be sure they're committed to at least quarterly communication. Know ahead of time which practitioner will be assigned to your account, and confirm that those meetings are part of client service and not something additional you'll be billed for.
Think of your accountant as more than a resource for tax planning, auditing, and bank lending. They also provide advice on business processes and technology — which is especially important as a franchise grows. A franchisor's standardized model should be vetted early, because a model that doesn't replicate well can generate problems.
For franchisees, don't underestimate your business's complexity, and consider your own unique needs. For example, many franchise owners hire family members — so ask potential firms if they have experience with family-owned businesses, and the unique dynamics that come with them. Believe it or not, accounting firms can help there.
Lastly, ask any potential firm for details on the most valuable projects they've completed for clients — then go talk to those clients, especially those who run businesses of similar size and complexity to yours. Those are the people who can validate whether or not the firm you're considering has the expertise you seek.
Related: 3 Financial Steps Small-Business Owners Should Take Right Now
2. What to Look For
From Travis Garrett, controller, Buffalo Wings & Rings
Garrett spent seven years as a CPA and knew what he wanted in Buffalo Wings & Rings' accounting firm. He chose RSM because it offered…
1. Industry-specific experience
Franchise experience is important, but so is sector experience. "Some firms know restaurants, [and] other firms have no idea," Garrett says. For food service, those considerations include labor law issues and oft-missed tax credits related to tipping.
2. More than accounting
Garrett needed a partner to help franchisees make decisions in an ever-changing business world. For example, he says, third-party delivery services like Grubhub and Uber Eats have regulatory quirks, and RSM helped franchisees navigate them.
3. Preparedness
Before Garrett hired RSM, he asked many firms to explain industry changes in tax law and accounting standards. "I didn't get very consistent, competent answers from most firms," he says. "But RSM just came in like, "We've done it. Here's how it is. Talk to our partners, talk to our clients.' "
Related: What Franchises Should Know Before Hiring a PR Firm
3. Unexpected Success
From Mike Merseburg, CEO, Wild Bill's Olde Fashioned Soda Pop Co.
What he expected: Wild Bill's sells soda and mugs at big events. The company wants to scale, but slowly — and Merseburg worried that an accounting firm might not respect that.
What he got: Since partnering with the firm Withum in 2014, Wild Bill's stopped growing its licensing business and is focusing on franchising. And Withum is helping the company grow at its own pace: "We're looking to add 25 franchise locations over the next 18 to 24 months," says Merseburg. "We're thrilled to have someone on our side who's going to help us scale."
