Book Keeping Franchise - The Book-keepers Forum (UK)

maruti · Newbie

Book Keeping Franchise

RobH · Expert

I suppose a lot depends on your confidence in being in business. There is certainly no need to go the franchise route if you feel able to market yourself and you have sufficient knowledge or support in what you are doing. However a franchisor has a responsibility to assist in many ways, be it in getting leads for you to get new clients, expert advice if there are aspects of the job you do not understand, a clear and defined pricing strategy and systems and stationery. A good franchise will also have a known brand but (with apologies to Bob at Crunchers) I don't think any bookkeeping franchise has that yet, so it begs the question is the brand of any value.

Then you need to look at price. I see some at around £5k and others at £10k. and of course they all carry a franchise fee of around 10% of turnover. What else could you buy for the business with this fanchise fee? Lots of promotion, lots of networking memberships? I'm not deriding franchises at all, I think for the right person a franchise is great and a reputable franchisor should make sure the potential franchisee is the right kind of person to benefit themselves as well as forward the brand (though the cynical side of me says they may just want the money!).

I think do your research, speak to a few franchises and get a gut feeling for the one you like best and ask then if you think it will propel your business sufficiently fast enough to justify the initial and on-going cost.

Also look out for The Amigos Accounting Franchise due to launch soon! The wisdom of the amigos and the amigas...which actually you get for free just by logging on here!

I'm sure we would all be interested in your decision and how things go if you meet up with any franchisors.

Cheers
Rob

-- Edited by RobH on Sunday 28th of March 2010 10:23:44 AM

PJC Bookkeeping · Veteran Member

Hi Maruti,

I enquired whether anyone knew anything about the Boogles franchise on this forum some while ago. I don't think there was any response at all so I don't know if this franchise is a good one to consider or not but the fee was at least £4K!

Good luck with whatever you decide to do.

Peter

PJC Bookkeeping Services

RobH · Expert

I think £4k isn't necessarily high, but it really depends what you get for your money. I'm also not keen on paying an on-going franchise fee, I think it would be something you would end up resenting. I would be interested to know whether you can leave the franchise and yet keep your clients. I would suggest having a solicitor who specialises in franchises to go over the contract, there may be clauses that the franchisor would be happy to alter/waive. It could be the best way to go for you but do it with your eyes open.
Rob

Zoe · Senior Member

Hi Maruti

The main reason people opt for franchises is the support they offer when starting up which is often exceptional and this is why there are high fees. Look carefully into the contract as you often have to pay the franchisor a percentage of your turnover and if you leave, the clients often belong to them rather than to you.

There are other options for those starting out. As Rob says, you can spend the money on a marketing push and building up your practice.

I don't mean to plug our services on here but our company was set up in response to exactly this problem - we spoke to franchisees who valued the support on start up but then felt they could go it alone - so offer exactly that support without the tie in of a franchise.

If you do decide to opt for a franchise, speak to other franchisees and ask them of the pros and cons of that particular one.

Good luck with whatever option you decide.

Zöe

BobHarper · Guru

@Maruti one way to look at a franchise is like a lot of suppliers all grouped together. For example you get a Corporate Identity, Website, hosting, email, software, stationery package, marketing resources, sales and marketing training and business coaching. You can do all of this yourself, use individual suppliers or join a franchise like a business partner.

Many people who go it alone do so for emotional reasons they want to be their own boss so they should. Others want to be part of something bigger and see more value in collaborating on the basis that two heads are better than one.

In my opinion a franchise should have developed processes, systems and resources which give you an advantage over going it alone and provide ongoing value. Thats what we have done with Crunchers.

@Rob when a franchise has an establish brand it may be too late to join or at least a lot more expensive. We have been advised to charge £30,000 to £40,000 to join Crunchers and we are developing a package at this price point.

A well known brand will help franchisees covert more leads at a higher price and I agree none of the franchisees have done it, yet. But, I think it is just a matter of time. All I know is that I would not want to be selling Pizzas in the same town as Dominos.

The initial fees are there to cover training and the resource to launch. Most bookkeepers start without any sales and marketing training and minimal resource and wonder why they dont win work. However, at Crunchers are developing a new low-cost franchise package for self-starters who feel capable of doing 90% themselves. This will be launched later this year at under £2,000.

Our management fee is based on 6% which would easily be covered by improved practice performance and extra revenue created by having rentals from the software and other things we are developing.

Yes, we need some money otherwise we dont exist but what we really WANT is the franchisees energy.

RobH · Expert

I take on board your points Bob, and I don't think we a million miles apart. It is good to hear that you are looking for the right kind of energetic franchisee rather than just another sign up. £30 to £40k? I would be interested to know what is on offer for that price point Bob, will it be a little like Tax Assist? Anyway I wish you well in this.

Rob

BobHarper · Guru

For that we would take someone who is not in business, set the up, teach them how to build and run a bookkeeping business.

The training would include getting them qualified, marketing, sales, pricing, leadership, practice and people management as well as getting some initial leads to get the ball rolling. We have not finished the model yet but it will be for people looking to build a £150k turnover business worth £200k so I think it's a good investment for some.

But, like I said...we are also looking at a package which will be for people who are "self-starters" which will be around £2k.

RobH · Expert

Something for everyone Bob. I agree it is absolutely achievable to build a business with a £150k+ turnover and to do it quickly isn't easy on your own.
Rob

Amanda · Expert

Rob,
Its very hard to think of you as a successful businessman that you are when I look at the picture of RODNEY!!!!!!

I do chuckle to myself when I look at the picture!

RobH · Expert

Hi Amanda....maybe I should put Boycie's picture up instead then!

And what should I think of Miss Piggy????!

lor · Guru

I liked the pic of you sat with you rabbit lol!

maruti · Newbie

Hi All,

Many thanks to you all for your advise and feedback!

I am assessing and putting together all pieces of information to see what makes more sense - franchise route or start on my own.

thank you
Maruti