How does your accountant look at the franchise financials?

Sarah Stowe

What does your accountant want?

Ready to buy a franchise? Time to pay a visit to your accountant. Here are some tips on what they want to see…

Before you get close to purchasing a franchise it really is imperative to take financial advice. You might already have a friendly accountant in mind, you might need to source one; in either case, the majority of the 10,000 plus accountants in Australia deal mostly with tax and GST issues. So it’s worth bearing in mind that a franchise-experienced accountant will have a depth of knowledge on franchise business matters that a more generalist accountant will lack.

All accountants though will look at the proposition you present them with in a similar way:

Structure of the franchise business

Whether your business should be a company, a partnership, or a trust

Tax

GST

Risk management

Capital gains tax

The job of your accountant is to test your assumptions. They will look at the downside of the prospective business, and this is what they are good at, says accountant Peter Knight of Smart Franchise.

Accountants need facts and figures. Some of the questions they will ask about your franchise choice:

What is it?

How does it work?

How does it make money?

How does cash move through the business?

What’s the upside?

Your accountant can help you understand the franchise offer you are set on, if presented with the right financial information. If you don’t have it, go back to the franchisor.