Going into business with a franchise

Have you ever wanted to be your own boss, but didn’t want to start a business from scratch? If so, buying a franchise might be the right choice for you.

When you purchase a successful franchise, you’re buying the right to sell a product or service using a system developed by the franchisor. You usually receive the right to use a trademarked name, training in profitably operating the business, advertising support, and other needed assistance. In exchange for these benefits, you’ll generally need to pay an initial fee and a royalty based on a percentage of sales.

After researching which franchises might be a good fit for you, ask each franchisor to send you its Uniform Franchise Offering Circular. This federally required document contains a wealth of important information, such as a sample franchise agreement, start-up costs, annual fees, and other key elements of your franchise investment. Take this information to your accountant and attorney for their review. Also plan on talking to other franchisees to see what their experiences have been. Ask them if they’re profitable. How long did it take to become profitable? Are they satisfied with the support they receive from the franchisor?

Once you’ve selected the best franchise for you, you’ll probably need to obtain financing. The bank will typically ask for a forecasted set of financial statements detailing your expected income, expenses, and cash flow for the first few years of business. These statements not only will help you qualify for the loan, but also they’ll give you a good feel for how profitable your new venture might be.

If you’re considering buying a franchise, please call us. We can review the financial concerns with you.

About Brenda J. McGivern, CPA

Brenda McGivern started her own certified public accounting and management consulting firm in October 2001. The full service CPA firm provides tax and accounting solutions to meet the needs of today's small business and individual. Brenda McGivern has become a trusted advisor and valuable resource her clients rely on for timely, accurate assistance when they need it. Before starting the firm, she worked as an accountant for three years at a local firm and prior to that five years at a large international CPA firm in Boston. She has performed the following tax services: federal, state and local tax planning, international tax planning, estate and succession planning, mergers and acquisitions, capital retention and IRS representation. She has also coordinated assurance engagements, such as financial statement audits, reviews and compilations from the planning phase through the reporting phase. She has prepared and reviewed regulatory filings for numerous regulatory agencies including the Security and Exchange Commission. Prior to these positions she was selected from over 2,000 candidates into an eight-person intensive financial management program at an international technology company. The program consisted of graduate level classroom study and two six-month rotational assignments in financial operations. She graduated cum laude from the University of Massachusetts at Amherst and holds a Bachelors Degree in Business Administration with a concentration in accounting. McGivern also holds a license in Massachusetts as a Certified Public Accountant and is a member of the American Society of Certified Public Accountants and the Massachusetts Society of Certified Public Accountants. She resides in Stoughton, Massachusetts with her husband Brian, and their sons Sean, Ryan and Conor and their dog, Davis.
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