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CFO services will also state to make sure you do your homework and watch and be careful if you are looking to buy a franchise. As a matter fact, the number one thing that CPAs see is that potential franchisees will come in to their office and be potentially hotter percent certain that they want this one particular business in the one particular business only. However, what they’ve notices they haven’t spent any time looking into any other options.
It’s kind of like buying a house, for example. Can you imagine if you only looked at one house and then bought that house right away, not knowing exactly what else is on the market?
You as a matter fact should have the confidence and over to yourself to look at multiple considerations, opportunities, and rev commendations. CFO services recommends looking at three differ considerations and putting those particular considerations down on a piece of paper and whittling down the pros and cons of those three particular franchises. You should at least have a shortlist of three, and be legitimately very objective in all the pros and cons of those businesses.
As well, be careful when you are talking about a preventative from that particular franchise. As there sole purpose, their job, is to sell as many franchises as they possibly can. And effectiveness, is the fact that they may or may not be the most trustworthy and honest with you in all of the pros and cons of joining that particular franchise. It is there only job is selling franchises, and they are in it because they will get commission on selling franchises. Usually the person selling the franchise will only get the money if in fact you by that franchise. Consider them like a car salesman, there is little to no difference.
Can you imagine, starting a business without a business plan. Do not necessarily walk into a business, plopped down all of your life savings, without knowing exactly what you have planned or diving into that franchise. You haven’t even potentially seen the financials of that franchise ergo, you will be able to make a plan.
What often happens is the representatives from the that particular franchise will state the fact that they will make a business plan with you only after you have bought that franchise.
What you should be doing is you should be doing your due diligence and you should be getting a CPA to help you to make a business plan ahead of you dropping all of your life savings on that franchise.
Likewise, usually the franchise owners are going to give you three specific locations of three of the franchises that are successful.
Make it your due diligence and your full-time job, suggests CFO services, to do your homework and make sure that you follow all of the work in order to make sure that you are making the best choice possible in terms of buying franchise.
What this means, says CFO services, is don’t necessarily follow in the ideas and suggestions of the representative from that franchise. Go it on your own, and potentially visit three or four of those franchises in locations of the city, the town, etc. Try make a point of visiting franchises in different states of financial situations. Attempt to visit a very successful franchise, a franchise that is in the middle of the road in terms of financials, and potentially find a franchise that is struggling, if you can. Generally what happens is if you go out on your own they owners will be very honest with you and forthcoming about their experience within the franchise, and how it is legitimately going.
Generally, in franchise disclosure documents you’re going to get plain paper documents. There is no involvement from an external accountant at all within these plain paper document presentations. These are simply documents that are prepared financials from the inside. Sometimes it’s incomplete in those documents information and they have a sneaky suspicion and a potential chance that they will deliberately leave financials out.
Just like is always adjustments in and at the year and so they don’t and are not quite that reliable. Make sure you try and request external accountant prepared financials for those three particular locations that you are looking at and potentially trying to buy.
In terms of plain paper, says CFO services, that is just a statement that means internally prepared documents. It means that there is no external accountant who has their name or any time investment in those put to killer documents in terms of preparation.
What will happen is when you retain a charter professional accountant, they are going to go through and start to calculate all of the reason abilities of each and every particular franchise and location that you are interested in. They will read the franchise agreement and they will go through it very diligently and with a fine tooth comb, and they will apply the royalty against the revenue. Obviously they will come up with a very impartial number and potentially very different number than those of which are working in particular for that franchise and wanting to sell a lot of franchises.
Be careful to because generally you’re not going to be able to get a good indication of what the payroll numbers are if you are talking within that particular organization. Remember it is a business and they are wanting to sell as many of the products, i.e., franchises, as they possibly can. It’s going to be the owners, or their families, from within those franchises who are going to be working and do not have fair market rates.
