Have you lost a lot of clients due to the impact of the pandemic?
Inevitably, franchisees will have lost some clients due to businesses closing during the pandemic. We’ve been fortunate that many small businesses are resilient, and a huge amount of Government grants and schemes were made available to protect our clients to keep their businesses trading. However, where clients have been lost, franchisees are reporting that they have been replaced with new business start-ups and established businesses seeking the services of a more proactive accountant. As a network, in 2021, our fee bank, client numbers, average fee and fee income are all up on 2020 and we anticipate this trend to continue.
According to the Organisation for Economic Co-operation and Development (OECD) data, growth in UK GDP of 7.2% is forecast in 2021 – higher than almost all other developed economies – and data from this first part of 2021 largely supports this. Looking further ahead the forecast for 2022 is further growth of 5.5%, meaning we could potentially be back to pre-Covid levels by the end of Q1 2022.
A large part of the forecast growth in GDP is attributed to small and start-up businesses. More than 810,000 new companies were incorporated in the 12 months to March 2021 – a rise of 22% on the previous year. Most expect this trend to continue over the coming years, fuelled by those who have been made redundant, who have been on long-term furlough or are simply frustrated with corporate life. This represents a great opportunity for our network because we are geared up to support start-ups.
Will I still be required to open a shop? Are they still a requirement if the high street is struggling?
The answer to this is yes, you will be required to open a shop before the end of your first year at TaxAssist Accountants.
All the evidence still shows that the extra credibility, visibility and walk-in business that a shop brings, helps franchisees to build a much larger practice, much more quickly than working from an office and is the number one tool to help with client attraction. In addition, having a visible presence within the business community helps to integrate the wide range of marketing activities that will be carried out on your behalf, and helps to reinforce the brand.
During the pandemic we’ve seen a surge of support for our ‘Buy Local’ campaign. Independent shops have really benefitted from the public’s desire to support their business community and found ways to purchase via digital means when people needed to stay at home. Our franchisees are proud to have shops in their local high street and they continue to generate significant levels of new business and are key to our franchise model.
Our dedicated support team assists franchisees through every stage of their move to a shop so you can lean on their experience. This comprehensive service covers finding the right premises, support with negotiating a lease and planning permission regulations through to refurbishment, staffing advice and holding a launch event. We are very selective on where we suggest a shop is located, and due diligence will be undertaken by both the franchisee in their territory, and the Support Centre virtually.
In 2020 our franchisees opened 24 shops and have opened 14 so far in 2021. High streets are continually evolving, but choosing the right location, means that TaxAssist Accountants will stand out as the one-stop-shop local hub for businesses and individual tax payers in their community.
I am a qualified accountant. Do I need a practising certificate?
When you join TaxAssist Accountants you will be engaging in public practice; therefore if you belong to an accountancy institute, they will almost certainly require you to obtain a practising certificate.
The features of a practising certificate vary from institute-to-institute, but generally they demonstrate that you’ve been a member for a specified number of years and are compliant with the institute’s regulations, for example, on Continuing Professional Development (CPD), ethics and professional indemnity insurance.
The application process and timescales to obtaining a practising certificate are dependent on your experience, the quality of your records, the institute to which you belong and other considerations. We would advise you to contact them direct to find out their requirements and how they apply to your personal circumstances.
We will discuss practising certificates further when you attend your discovery day.
How do you justify your franchise fees and why should I join TaxAssist Accountants rather than one of the other accountancy franchises?
Formed in 1995, we are the leading franchised accountancy organisation with many years' experience of operating a substantial national network of branded offices that is well recognised and respected.
We have a highly visible presence with over 245 franchised areas across the country, operating from over 410 shops and offices. The shop front brand is supplemented by the many branded cars driving around the country, national advertising, online presence and marketing collateral. We constantly look to be at the forefront in terms of brand awareness, technical training and support for business growth. Our training courses, in particular TaxCalc, Practice Ignition and Dext (Formally known as Receipt Bank) software, as well as a raft of bolt-on relevant business services our franchisees can offer their clients at significantly discounted prices means in our opinion, that we are market leaders whose offering far outweighs the competition.
All of the Support Centre staff are committed to supporting the franchise network and their clients with no other business interests to take their focus away from the importance of assisting the network. The five executive directors have a breadth of business experience which they bring to the franchise. Karl Sandall had 26 years working for a major clearing bank, and is an ex-bank manager. Sarah Robertson is a Chartered Marketer who previously operated her own Marketing and PR company. Phil Sullivan spent 26 years with HSBC achieving Executive Management status before leaving to establish his own business providing corporate and commercial advisory services. James Mattam has spent his entire full-time career with TaxAssist and has vast experience in IT, marketing, business development and training. Daren Moore FCCA, has over 26 years of expertise in the accounting industry, having worked his way up to a member of the Management Board of Price Bailey, where he had an outstanding track record of achievement.
Can I talk to some of your existing franchisees?
We would need your CV and Personal Information Form to assess your suitability before giving names and contact details out. We will give you access to the whole network, after you have attended a Discovery Day, and we would encourage you to speak to at least six franchisees as part of your research.
What if I already have clients before becoming a TaxAssist Accountant?
We have recruited accountants who already have a block of clients of their own acquired during the period before they joined us. We have been asked to consider whether some relief can be given against charging our normal rates of Management Service Fees. Our policy for this scenario is subject to a minimum fee base of £5,000 being involved, we will allow the fees introduced or acquired to be kept in a separate pool and for one year only we will charge a 3% Management Service Fee on these fees. After twelve months these fees will be amalgamated with other fees acquired during the TaxAssist Accountants Franchise term to form one pool and full Management Service Fees will be payable on the total pool of fees.
For how long is the franchise granted and is there a fee payable on renewal?
The term of the Franchise Agreement is five years, but this is renewable by you every five years for an administration fee of £750 – assuming you have operated the franchise as set out in the Franchise Agreement including meeting your minimum targets. In most cases, we anticipate franchisees will renew the Franchise Agreement to continue the franchise every five years until they dispose of it at some future date. We also now offer at our discretion a 10-year plus Franchise Agreement.
Does this contract permit me to sell my business?
Yes, the client base is a considerable asset built up and owned by you. The value of your business is calculated as a multiple of your gross recurring fees. Current industry averages are between 0.8 and 1 multiplied by the gross recurring fees. The TaxAssist Accountants brand attracts a premium and we are achieving multiples up to 1.4 times annual billing. There are various deferred fees to consider which are laid out in our Franchise Agreement, which you would factor into your selling price.
I perceive that it will be too expensive to go into shop front premises in my area. Is it absolutely necessary for me to make this move?
You will have up until the end of your first year to find and move into a shopfront. We have franchisees who have managed to find good shop front premises when at first glance there appeared to be nothing remotely suitable. It is location, location, location translated as visibility, accessibility and affordability. This will help you to achieve the growth that we both seek.
Do I have to pay a deposit? If so, is it refundable?
If we offer you a franchise, you can reserve an exclusive postcode territory for 30 days for which we require a deposit of 10% of the Franchise Fee.
If you enter into a Franchise Agreement with us then the deposit will be credited against the Franchise Fee. If for any reason the Franchise Agreement is not signed before two weeks prior to the Commencement Date then we will agree to refund the deposit less a sum to cover any expenses incurred by us.
I am a qualified accountant. Do I still need to go on all of the training and pay the full franchise fee?
We understand that you would naturally wish to avoid any unnecessary duplication and expenditure, but because we have correctly identified a niche in the market, our training is specifically tailored to address that niche and nothing else. Past experience has shown that even fully-qualified accountants will benefit from full participation in our training course.
What exclusive rights do you get?
You will be allocated an exclusive marketing territory defined by postcode boundaries. No other TaxAssist Accountant can market directly in your area or vice versa. When you and other franchisees carry out local advertising in publications covering more than one franchise area then the normal procedure is to share costs and divide out responses according to the geographical areas covered by you. However, should you receive a genuine recommendation from a potential client outside your exclusive marketing territory then you can act for that person.
May I have a copy of your Franchise Agreement?
Yes, we will be pleased to give you a copy of the draft Franchise Agreement following the attendance of one of our Discovery Days.
What fees do I charge?
We give you guidance on the level of fees that you should charge your clients, but the final decision on the exact amount is up to you.
How much net profit can I earn from my operation?
This is really down to you but we want you to build up your turnover and profits consistently, aiming for 400+ clients with a turnover of £300,000 + after 5 years. Some franchisees are happy to maintain this level, comfortable with both the income generated and being relatively light touch on the business, while other franchisees continue to work full-time on the business pushing it past the £500,000 turnover level.
Our training covers the staffing requirements for your business and we expect a third of your turnover to cover the costs of running your franchise, with a third payable for your staff, leaving you with a third of your turnover as net profit.
Is there an extra cost if I wish to bring my partner on the initial training course?
Yes, there will be an additional cost, because the Franchise Fee caters for only one person. We make our training course costs as reasonable as we can for partners/staff etc., because it is beneficial for both franchisee and franchisor to have a well-trained network. Please ask for further details on costs on or after your Discovery Day.
Do you train me? Who pays for my training?
Full and professional initial and ongoing training is provided to all franchisees. Accountancy and tax training is provided by in-house staff and specialist training partners for franchisees. The initial training course which lasts for six weeks is included in the Franchise Fee as are the specific follow up days: 44 days in total.
We also provide further update days, operations manuals, have an award-winning support website which offers our franchisees access to technical releases, marketing strategies and templates, online tutorials, advice, additional service providers, training materials, practice management tools and the ability to update your own website.
All financial information in this prospectus or website, with the exception of any financial information in the international section, is intended only for prospective franchisees in the UK. This information is based on actual historic information provided to us by our operating franchisees in the United Kingdom, Ireland and Australia, and not elsewhere. Accordingly, if you are considering operating a TaxAssist franchise in any other country, do not review or rely on this information. It relates to the UK only, and the differences between the UK and your country in respect of how long the system has been operating, the reputation and goodwill of the brand, the economic environment, competitors, industry associations and other factors make this information inapplicable to you. If we have elected to provide financial information for your country, it will be expressly set out in the international section.
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