IS tHAt A Fr AnCHISE?

franchising has long since moved from its original roots in fast food and automotive services. Today, virtually everything we use or consume is associated with a franchise system of one type or another before it reaches the end user.

Tangible and intangible franchises embrace both the exotic and the mundane and it might be said that everything that can be franchised has been franchised. What next then? has franchising reached the end of the road? an area that has not been successfully promoted as a franchise opportunity, up to the present time, is the professional service area. While some financial services and business services have deep roots in franchising professions such as accounting have not taken the franchise route.

This may be in part due to provincial or state regulations that do not fully endorse a franchise network approach. however, things are changing, and cPas are beginning to embrace the franchise model as an alternative start-up route or as an expansion vehicle.

Why do entrepreneurs gravitate towards a franchise opportunity rather than starting a business from scratch? This is a question that has been answered in many ways depending on the franchise industry in question. There are solid positive answers that will often influence a would-be franchisee in making their decision. With the continued growth of franchising, most individuals starting a new venture will choose the franchise approach as opposed to a do-it-yourself approach.

starting an accounting business from scratch has the same basic set of needs that exist for many businesses. Technology will play a central part in determining how an accounting practice is created, understanding, and researching appropriate technology can be a costly and timeconsuming business. i n setting up a practice, unless an individual is absolutely determined to be a one-person operation then finding and recruiting staff at both the qualified and support levels will prove an additional challenge.

some accountants choose to specialize in a specific area and as such seasonality may be an added factor to meld into the start-up decision. as a start-up, a cPa must be sensitive to the growth of the business and the necessary marketing associated with growth while at the same time affording appropriate time to service clients and their ongoing needs. a support team, written procedures, and systems are all requirements in establishing a new business but are areas often overlooked in the interests of time and cash flow.

starting any business has these same basic ingredients albeit in a slightly different format. Franchising brings a tried and tested method to the marketplace, and this is proving to be the case with a cPa practice in much the same way as a more conventional franchise.

i n establishing a cPa practice the proprietor will not only face the start issues that we have discussed but will also face demands from clients and potential clients. accounting is a complex and regulated service and as such a cPa needs a very solid knowledge base from which to operate. clients expect face-to-face services even in times when a virtual relationship is becoming the norm. clients certainly expect timely delivery of services and a fluid communication system that allows them access to information quite often in a multi-jurisdiction environment. This is notwithstanding that their service provider is located only in one jurisdiction.

client expectations may fall into a higher category than a straightforward retail store or restaurant. While most established franchise systems utilize technology to run their operations the level of technology needed in a cPa environment might be considerably more complex than at a retail store level. With many business models choosing a virtual platform from which to operate the need for sophisticated technology becomes even more critical. i n the world of cPas, businesses can now be effectively operated on either a conventional storefront basis, home office, or on virtual basis. a properly structured model in either format can afford the owner a good growth opportunity. as we have stated franchising a professional business such as a cPa operation has not been an option. however, there is no real barrier to franchising a cPa business. as with any franchise system, if the franchisor has an established business with a proven track record and that business model can be replicated then franchising is a real possibility. a franchisor that can bring both experience and a success story to the table is a long way toward being able to create a viable franchise. Franchisors in the cPa area have extensive technology reserves and support mechanisms that again fit well into a franchise framework. With franchisors able to provide a support team that is multi-faceted in terms of accounting and accounting/tax-related matters the basis for a franchise is created.

We have explored the issues that stand in the way of a quick start-up operation as a sole proprietor and the issues of getting a practice up and running with a steady flow of business alongside the human resources to handle the expansion curve. Franchising with experienced ‘been there and done that’ franchisors can alleviate these hurdles and get a cPa business under a franchise banner operational in a time and costeffective framework.

There are few cPa-type franchises in the marketplace at the present time. While there are regulations and professional

David Banfield has spent several decades engaged in the Franchise industry, most recently as President of a Multi-National Brand. He is currently engaged as the Senior Growth Advisor to Make My Day CPA an emerging CPA franchise brand.

Dbanfield@makemydaycpa.com bodies that will opine on the suitability of such enterprises the fact is that professional franchises such as ones delivering bookkeeping, accounting, and tax services in a single package are viable and professional in today’s franchise environment.

The next decade with certainly see a host of new professional service franchisees entering the marketplace as statistics tell us that the need for accounting services continues to grow however the growth rate of professionals that service the growing marketplace is static thus creating a substantial business opportunity for franchisee growth.

Yes, a cPa business can and is a franchise opportunity and one that will create a change in the delivery of accounting services in the years to come.