Malvern Accounting & Tax Specialists
TAX ACCOUNTANTS FOR FRANCHISEES & FRANCHISORS IN MALVERN
We provide peace of mind for you and your business by delivering Taxation, Accounting and Bookkeeping services to Franchisees & Franchisors in Malvern.
Are you a Franchisee Or Franchisor?
Are you Considering purchasing a franchise business? Or perhaps Expanding yours?
Malvern Tax Accountants have many years of experience with well-branded Franchisees As a franchise accounting firm, successfully providing franchise accounting services, franchise business advice, franchise business strategy and services.
Franchises are big business in Australia with a turnover of over $80 billion a year. Buying into a franchise is often promoted as 'buying a business in a box' complete with the brand, all the systems, processes and marketing. However, it's not that simple because there are strings and legal red tape attached.
How much does it cost?
Most franchisors charge a high start-up cost. Franchise fees range from as little as $45,000 for a mowing business to as much as $1 million or more for a McDonald's restaurant. Also, franchisees are generally required to pay ongoing fees for support, which may be a fixed monthly amount or calculated as a percentage of gross turnover.
It's essential to work with your accountant before starting or buying any business, but the substantial upfront franchise fee makes it even more critical. Remember, product development, production processes, branding and marketing are all there on a platter waiting for you to serve up to the public, but stricter lending criteria and reduced risk tolerance from the banks make obtaining finance difficult.
We recommend you have your franchise agreement reviewed by a professional, preferably a solicitor and an accountant to ensure the franchisee understands what they are signing. So many franchisees don't know what they are buying into, and we have seen people distressed when they realize that apart from the upfront joining fee, there are ongoing monthly franchise costs for advertising and marketing.
These were spelt out in the franchise agreement, but the franchisee was so eager to buy they ignored the fine print in the contract. The whole relationship starts on the wrong foot, and it is hard to transfuse the bad blood.
Franchisees need to understand that the franchise agreement will come to an end at some point in time. The contract will probably provide options to renew, but in any business, you need to start with the end in mind. Your tax structure needs to factor in the potential discount capital gains tax concessions, and you also need to consider your ability to on-sell the franchise or business to a third party plus your alternatives at the end of each option. Franchisees who don't do their homework and seek legal advice from the outset can be left in a vulnerable position when a franchise agreement ends. Despite spending potentially hundreds of thousands of dollars to buy into the business, the franchisees ignore the other end of the transaction, the sale. Buyer beware of the clear message, and we are amazed that so many franchisees say they were simply unaware that this could happen when it is spelt out in the contract.
Our experience and relationship with franchise groups give us real-time insight into franchise systems and their performance. We provide franchisees with business, taxation and accounting services. We also act as consultants to the Head Franchisors in setting up Accounting & Cost systems and structures. We can offer due diligence services for Cash flow projection, Franchise Acquisition & Feasibility for new franchises.
Over the years, we have developed the requisite expertise in tax and accounting for franchises and have a team of skilled franchise accountants ready to serve you in Malvern or anywhere in Malvern.
Accounting
Our services include all aspects of tax accounting and planning, pre-30 June reviews, tax cost minimisation strategies, capital gains tax record keeping, BAS and IAS requirements, and cloud bookkeeping services. We will make sure you comply with all statutory requirements at both state and federal levels – it is our job, not yours, to keep up with all the legislation.
Bookkeeping
Let Malvern Tax Accountants, we take care of your XERO and MYOB bookkeeping needs while you focus on growing your business! We offer bookkeeping services for small businesses in all the major suburbs in Malvern. We will take care of your books while you focus on making more sales for your small business. Check out our accounting solutions and see which suits your needs.
Taxation
We ensure that you are structured in the most tax-effective manner so that you can be confident that you are paying the least amount of tax possible. Legally minimising the amount of tax payable is strongly dependent on having the appropriate structure in place so that you can apply the funds towards growing a sustainable business.
Buying a Franchise
If you're looking to start a business, buying into a franchise can be an excellent alternative to starting a unique venture. Similarly, if you're planning to expand your business, a well-managed franchising agreement can be an effective way of moving into new markets.
Buying a franchise is a big decision and one you need to consider carefully.
Franchising allows one business to operate under the trading name of another business' established brand and sell its products and/or services for a specified period.
Like any business decision, franchising must be considered carefully, and the right processes should be followed. It's essential also to note that the Franchising Code of Conduct regulates franchising.
You'll want to be as sure as possible that you're making a wise decision. That's why it's so important to get the right advice regarding the financial side before you sign up with your franchise.
That's where a franchise accountant can help.
We've worked with hundreds of people, just like you, who are looking to buy a franchise, so we understand what you are going through. We have developed a range of specialist services for this stage in your franchise journey, which means we can assist you in the best possible way.
Once you're ready to make a start with your investigations, several steps form part of your financial due diligence.
Buying a franchise gives you the right to run an established business and sell its products and/or services for a specified period. Before you buy a franchise, consider the same issues as when purchasing or starting any other business, along with issues specific to franchising such as what happens if the franchise or franchisor fails.
To improve your chances of success, try using our Starting your business checklist.
It's essential that you also understand that once you have entered into a franchise agreement, you are legally committed to run the business according to the requirements set out in the franchise agreement and the franchise operating manuals. You'll also be bound by the mandatory Franchising Code of Conduct.
Read about Complying with the Franchising Code of Conduct.
Pre-purchase Review
If you're buying a franchise, you need to check the numbers to make sure they stack up.
This is one of the essential elements of your investigation. If the numbers don't look like they work before you even start, there is little chance they will get better once you're underway.
That's why you need a franchise accountant to go over the numbers. We can help you evaluate the feasibility of the business opportunity.
Business Trading Structure
Your Business Trading Structure is the structure that you will operate your business through.
Business structuring is a complex area. There are many factors to consider when deciding the most appropriate structure for your franchise business and to protect your assets.
As practicing accountants we:
- Carefully consider your financial position before we make our recommendations
- Recommend the best trading structure for your situation, taking into account the nature of the franchise
We can also take care of the necessary paperwork and company registrations with the Australian Taxation Office and ASIC. We can also help with your bookkeeping and tax, making sure it's set up correctly and in a streamlined way.
Individual accounting services, wealth strategy, insurance, and financial management. Prepare and lodge your tax return with Malvern Tax Accountants, a registered tax agent in Malvern. Let us do the hard work, with professional advice and ensuring maximum refund and paying minimum tax.
Are you already operating or considering starting a business as a sole trader? Malvern Tax Accountants can help as we are a 'one-stop-shop' for accounting services and tax advice for sole traders and small businesses.
Professional Services
Providing accounting, tax and business advisory to professional services industries comes naturally to Malvern Tax Accountants. We have a large clientele of professional services clients who seek advice and knowledge specific to their industry.
Business Plan
Whichever franchise you decide to purchase, you will need a business plan.
A business plan is the road map for your business. Preparing the plan will help you define your goals and business milestones. Having a plan also makes it much more likely that you will achieve your goals.
Some franchisors provide a template business plan. This can be a bit daunting if you're not familiar with what needs to go in it or how to put it together. We can assist you in completing the details.
Other franchise groups leave the business planning up to you. If that's the case for the one you're looking at, don't worry. We have a straightforward planning process we can work through together.Our approach is:
- Straight forward and practical
- Written in plain English
- Easy to implement with clear action points to follow
We can also assist you with preparing plans required by your bank as part of your finance application.
Business Advisory
Building and maintaining a successful business in today’s rapidly changing environment is a balancing act. Sustaining year on year growth, while keeping up to date with commercial and legislative compliance and managing the challenges of daily business operations, places huge demands on business owners and directors.
Our specialist advisors work with you in a role to help you plan and implement contemporary business practices that will allow you to keep a close eye on the detail while not losing sight of the big picture.
Our Self Managed Super administration service can help you achieve the benefits of an SMSF by taking care of the administration and compliance of your SMSF, creating free time for you to focus on the critical job of managing the investments of your fund.
With a self-managed super fund, you are in charge of your super and where it is invested, plus you manage those investments yourself.
Financial Advisory
At Hillyer, Richeswe provides comprehensive financial advice to our clients with an enthusiastic and proactive approach. Our strong team of experienced professionals will work with you towards identifying valuable solutions on how best to achieve your goals. Malvern Tax Accountants is a Malvern based Chartered Accounting firm offering timely and cost-effective services to both individuals and businesses. We consist of a team of accountants and business consultants dedicated to providing the highest quality accounting, taxation, bookkeeping, and business advisory services.
Legislative Requirements
If you are thinking of buying a franchise, you should also familiarise yourself with the legislative requirements. The legislation demands that a franchisor give a potential franchisee a disclosure document at least 14 days before the new franchisee enters into the franchise agreement. The contents of the disclosure document are set out in the legislation, but in terms of the financial aspects it will cover the following:
- Provide an estimate of the total costs involved in establishing a franchise
- Provide details of ongoing payments to the franchisor
- Provide some information about financial performance. However, franchisors can elect not to disclose any information
- Provide a summary of the most recent financial statements of the franchisor (in section 20). Alternatively, the franchisor can provide a statement verified by a registered company auditor that the franchisor can meet its debts as and when they fall due.
Cashflow Forecast
Cashflow is one of the most important things for a franchise owner to manage. This begins right at the start of your franchise journey when you consider the cash flow for your first year in business.
The Cashflow Forecast provides more detail about how the cash will move through the business. It shows when you expect money to come in and go out. It will also highlight when there may be a shortfall. Knowing this will help you develop a plan to cover any gaps.
Also, your bank will require you to provide a Cashflow Forecast if you are borrowing money to buy the franchise.
A Cashflow Forecast can be tricky to prepare if you've not done this before. That's where a franchise accountant can help you. We have prepared many of these reports and have specialist skills in putting put them together.
Since its inception, Malvern Tax Accountants has been at the forefront of tax and accounting, providing a broad range of services to local businesses in Malvern. We offer Individual Tax Returns, Business Taxation and Accounting, Financial Planning, Self Managed Superannuation Funds, and Bookkeeping services.
Malvern Tax Accountants understand Doctors and Healthcare professionals require specialist attention. Our team of experts offers friendly, industry-leading advice relating to tax, GST and compliance that will maximise your return, addressing all your financial requirements.
We have extensive experience in servicing the manufacturing industry, including the provision of accounting, information technology, and audit services, and regular periodic management reporting. Supplemented with more detailed financial analysis, this lies at the heart of astute commercial decision making.
Malvern Tax Accountants Tax Accountants in Malvern also specialise in helping small businesses to achieve great things. Whether you run a bar, restaurant or coffee cart, our accountants are here to offer an extensive range of accounting support services for your hospitality business.
The Franchise Traps
While some franchisors market their franchise as a simple 'turn key' operation, running a business requires energy, passion, persistence and commitment. There is no substitute for hard work, and if the business were a money-making machine, surely the owner would set up more sites and employ the staff?
The number one question that prospective franchisees want to know is, "How much will you earn?" It's a fundamental part of the buying equation, and some smart franchisors now offer income guarantees, particularly in the service franchises. Given these types of franchises generally attract first-time business owners moving from a salaried employment position with a regular income to the uncertain world of self-employment, the income guarantee can be very appealing. These income guarantees are often stated as '$1,000 a week for the first ten weeks to reassure the franchisee and reduce the perceived risk of investing.
Given the economic conditions, other franchisors are offering prospective franchisees a guaranteed income of say $50,000 per annum. This provides the franchisee with a degree of income stability for the first year of operation and can help the franchisee secure finance to fund their franchise fee.
While income guarantees might provide short term peace of mind for new franchisees, they expire, and buyers need to look beyond income guarantees when assessing a franchise. What if the operator is not suited to the type of work or has no marketing skills? Generally speaking, most people looking to buy a franchise will look at least two different franchises before making a decision. You need to look at the total package, including the price, training, equipment, marketing materials, ongoing fees and income guarantees when assessing the offering. Don't make the decision based on one part of the offering because, in some instances, the income guarantee is just a recruitment incentive.
We have extensive experience in financial services for medium-sized trade businesses. The services we offer are all aimed at doing what really matters – ensuring your financial growth and freeing up your time so that you can enjoy life.
We understand what farmers require to effectively manage the finances of their farming operations. We have been a leading provider of business and financial advice, taxation, and accounting services to Primary Producers and the rural sector for more than 30 years. Enquire today to find out how we can help you with your farm.
Our experience and relationship with franchise groups give us real-time insight into franchise systems and their performance. We provide franchises with business, taxation and accounting services. We can also act as consultants to the head franchisors in setting up cloud accounting & business and structures.
At Malvern Tax Accountants, our specialist property tax accountants in Malvern are renowned for their property tax accounting services for property investors. Our property tax accounting and tax advice extend to the various estate planning factors including ownership and control of assets.
Thinking of Buying a Franchise?
If you've established a successful business that you're looking to expand, you can consider franchising. If managed well, it can open your product or service to new markets and extend your brand's reach. Before you franchise your business, make sure you have a successful and proven franchise model.
Operating your franchise model before selling a franchise to someone else can help prove your concept, establish demand and create sound processes and systems that can be repeated in each new franchise. There is no specific franchise registration or approval process, but establishing a franchise is a legal process and can take some time. You must plan thoroughly and seek professional advice from an accountant, solicitor or franchise consultant. If you decide to franchise your business, you must have a good working relationship with the franchisees. You must be careful to select a franchisee that is a good fit for your franchise business.
We are recognised as business start-up specialists. If you are looking to buy a franchise, there are numerous issues to consider, including your business structure, tax registrations, insurances and accounting software. As business advisors, we can assist you in all of these areas plus provide advice on HR matters, payroll and the preparation of a business plan.
Over the past decade, our team of accountants has helped several franchisees get their business off to a flying start by building solid foundations.
In a business sense, this includes the right taxation structure, accounting software, insurances and website. Your choice of business structure is critical, and there are several different options, such as sole trader, partnership, company and trust.
When it comes to selecting the most appropriate tax structure for your business, we always recommend you start with the end in mind.
Australian tax laws are complex, and changing your business structure at some point in the future can trigger a capital gains tax event that could prove costly. Whenever we provide advice on business structures, we always take into account issues like:
- Minimisation of Income Tax
- Maximize Asset Protection
- Allow for the admission of New Business Partners or Investors
- Comply with all Legal Requirements in your Industry
- Consider Future entitlement to Discount Capital Gains Tax Concessions
- Risk Profile of Your Industry
As a consequence, we often find the business structure is a compromise based on the relative importance of each of these issues.
Your choice of accounting software is another brick in your business foundations, and up to date, accurate financial records let you make informed business decisions. The wrong choice of software can be catastrophic and poor business records are one of the biggest causes of business failure. You need to match your business needs with your level of accounting skill, or you could end up producing 'computerised shoebox' records that cause frustration and extra fees. This conflicts with our mission of helping you slash the cost of bookkeeping and compliance.
We at Malvern Tax Accountants, want to be your accountant and business advisor, not just a bookkeeping service.
You'll find we support a range of software options but do have a preference for cloud-based solutions like MYOB.
You also need the right tools and when 'constructing' your franchise business. Over time we have developed several tools including a start-up expense checklist that breaks down your start-up cost into various categories including:
- Tools and equipment
- Professional advice and software
- Information technology costs
- Marketing and signage
- Vehicle and trailer costs
This checklist will help you identify all your potential establishment costs, and these figures then filter through to our cash flow budget template and allow us to produce a projected profit and loss statement for your first year of trading. These reports can also tuck neatly into our business plan template that is designed to help you secure funding from external sources like a bank. Our business starts up checklist is another useful tool.
For some franchisees, your car, van or utility is arguably your most crucial business tool. You can download a Motor Vehicle Tax Guide to learn more about the alternative methods of claiming your vehicle expenses and the distinction between a business and a private trip for business.
In summary, there are numerous issues to consider when buying into a franchise operation. There is no substitute for professional advice, and over the years, we have helped many franchisees and several franchisors work through the process.
Contact us today about your franchise idea or purchase, and we'll help you make an informed business decision.