Edmonton Accounting Firm | Why Compare Franchises
Often, when entrepreneurs contact their Edmonton accounting firm to help them look at a business opportunity. They often have their heart set on the opportunity that they have. And even when it is the opportunity to buy a franchise, they should look at several different options together.
The reason why they need to look at all of the different options at the same time. Is so that they can objectively compare their opportunities together. So that they will be able to see if the opportunity that they are looking at is as good as they think it is.
Some of the things that they should be comparing says Edmonton accounting firm. Include the franchise fee, as well as the royalty fees. And then see if the royalty fees has a cap on it. Or if there is a chance that those fees will increase year over year.
Other things that they should be compared to each other, is all of the things that are included in the franchise and royalty fees. Because some franchises will include all of the advertising initiatives, such as national television campaigns, radio spots and magazine advertising.
And other franchises will have an optional or mandatory buy-in. And business owners need to know, if they want to purchase a franchise, that has additional fees that they have to pay if they want to advertise. Or even fees that they must pay in addition to the royalty fees.
They should look at this same information with things like the website, and any branded packaging that they provide. Because some franchises this is mandatory, some is included in the franchise and royalty fees. And people should understand exactly what they are getting into.
And other things that they should be looking at whether they want to purchase this franchise opportunity or not. Is what systems and processes are included in the franchise fee.
For some franchises, it comes with proprietary software, that helps them run the systems that they need to be successful. Other franchises come with a list of all of the processes and systems that they have created. That anyone can follow in order to run that successful business.
A great example of this is the fast food restaurant McDonald’s. They have a lot of systems and processes for everything that needs to get accomplished. From hiring staff, to training that staff. How to cook and serve the food. As well as exactly how to talk to the customers.
Many people would most likely decide not to pay the extremely high franchise fee that McDonald’s demands. If it did not come with all of those systems and processes. Because McDonald’s is extremely well known for those processes that they have created.
This way, business owners can compare multiple franchises at the same time. And figure out if the opportunity that they were interested in. Truly looks as good as they initially suspected before they came to Edmonton accounting firm
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Many people are very excited to buy a franchise says Edmonton accounting firm. Because they see the franchise as an easy way to get into being a business owner. That has a very low failure rate.
However, if people are looking at franchises, one of the first things that they need to do is hire Edmonton accounting firm to help them make an objective decision. By looking at different aspects of the franchise that they may not think to do themselves.
Often, people will be talking to a representative of the franchise. In order to start hearing about the opportunities that the franchise has. However, they need to keep in mind that this representative, while they seem like a business advisor are not.
Instead, business owners need to keep in mind that they are a paid salesperson. That gets paid for every franchise that they sell. Therefore, they are not going to try and encourage a decision that is in the business owner’s best interest. But a decision that is in their own best interest instead.
And in addition to trying to sell a franchise. And not necessarily help a potential business owner make the best decision for them. They will often use a wide variety of sales tactics. Including as falls sense of urgency. To encourage the potential business owner to make a decision quicker.
And without considering all facts. This is where hiring an Edmonton accounting firm can be very beneficial. Because they can be on the side of the potential business owner. To encourage them to make the best decision. Whether it sells a franchise or not.
Potential business owners also need to keep in mind. That this fall sense of urgency is just that, false. And even though the franchise representative might say that the opportunity is going to disappear quickly. This is generally not the case. But if it does get purchased by someone else.
It will not be very long for that same franchise representative to be able to find new opportunity. Because their entire job exists to sell franchises. And to have only one opportunity before there is no more opportunities left. Will not make a very good job for this person.
Therefore, that can help business owners understand that they do not have to give into this sense of urgency. So that when they are Edmonton accounting firm can asked them to get accountant prepared financials.
If the representative pushes back by saying they cannot because the opportunity is going to disappear. Then it can help the potential business owner from saying they do not mind waiting, and they are not going to purchase without this information.
By looking at the reasonability of the numbers, as well as comparing multiple franchises together. Can help business owners get the answers that they need. On whether this is truly a great opportunity. Or if it just looks like a good opportunity. Because the name is known.
Truly great opportunities will look good on paper as well as under close scrutiny. So people who are thinking of purchasing a franchise should understand this. So they should scrutinize any opportunity. Keep them from purchasing a business that is not in their best interest.