Franchises in the accounting and financial services category cover an array of services such as accounting, financial consulting, loans and commercial finance, brokerage, payroll, expense reduction, insurance, invoicing, business coaching, debt consolidation, wealth management, medical billing, ATMs, and more.
However, the most notable subset of the accounting and financial services franchise industry is probably tax franchises.
According to Accounting Today, taxpayers—even with all of the options for self-serve tax preparation—still prefer an independent tax preparer’s opinion on their individual situations.
The percentage of tax filers in the U.S. that use a professional tax preparer, such as a tax franchise, has been steady over the years. Lack of time and an increasingly complicated tax code are two primary reasons why people and companies tend to seek outside help in preparing their tax returns.
Consider this: The IRS estimates that it takes 16 hours (including the time it takes to gather the necessary documents) to complete the Form 1040, the individual return that nearly 70% of Americans use. However, if individuals own a business, have investments beyond a typical IRA or 401K, or have any kind of other layers to work out on his or her tax forms, their taxes could be more complicated to fill out and file.
Tax franchises can help these individuals and businesses sort through the complex tax filing process and provide a measure of peace-of-mind to their customers. When an individual signs a tax return, it means he or she is on the hook for any questions the government might have – even years down the road. By using a tax professional, like a franchise, individuals can provide themselves a buffer between them and the IRS in case an audit occurs.
Also helping attract franchisees to the industry is the diversity of services that they can offer, further bolstering income potential. While taxes are the focus, many tax preparation franchises have evolved to also assist clients in other areas of the industry such as: accounting, bookkeeping, billing or payroll services.
In addition, prospective franchisees can choose to concentrate on a specific market. For example SiempreTax+, an affiliate of Liberty Tax, specializes in tax return preparation for individuals and small businesses in the Hispanic & Latino market. It also offers a variety of additional services developed specifically to meet the needs of Hispanic consumers.
Initial Investment and Opening Costs for Accounting and Financial Services Franchises
The amount necessary to open an accounting and financial services franchise varies depending on the unique business system and execution requirements.
The exact opening costs for a given accounting and financial services franchise depends on many factors, including but not limited to: the franchise fee, training expenses (such as travel and living expenses, not the actual training courses), grand opening advertising and marketing costs, the cost for a dedicated office space (if necessary), and more.
The franchise profiles on our website will present you with a basic range for the initial investment or minimum cash required to open a franchise. But when it comes to finding out the details of an initial investment, the franchise disclosure document is the best place to look. Franchisors offer itemized estimates in their franchise disclosure document (FDD) based upon their experience establishing, and in some cases operating, units.
Keep in mind these estimates are just that, though—an estimate. Prospective franchisees should review the figures presented with a business advisor, taking into consideration their unique circumstances, before making the decision to enter into a franchise agreement.
Top Benefits of Being an Accounting and Financial Services Franchise Owner
The benefits of owning a franchise can be numerous vs. independent operation. Here are a few of the top benefits for those who decide to own an accounting and financial services franchise instead of going at it alone.
Name Recognition: When it comes to finding a service provider to handle their money, people are likely going to want to deal with someone they trust. Franchises tend to have established brand names that, in many instances, have been around for years. If you buy an accounting and financial services franchise, you will be given the right to associate your business with that accounting and financial services franchise company's name, trademarks, and logo.
Advertising: Getting your name out there can be expensive and sometimes it can be hard to know where to spend your advertising and marketing budget. With a franchise, national advertising is typically done by the franchisor. In addition, though in general local advertising is up to you, you’ll have guidelines in place.
Training: A popular feature with all franchises, training is provided to accounting and financial services franchisees. For instance, H&R Block franchisees go through initial training of over 20 hours of classroom/virtual instruction and 16 hours of on-the-job training. The franchisor also offers ongoing training opportunities related to the preparation of tax returns. Franchisees and their employees may also be trained annually on H&R Block’s products and services or on other compliance-related matters that the company designates as required training.
Support: Before the franchise is opened, in addition to initial training, accounting and financial services franchisees often receive support in developing their business plan. While in business, franchisees will have access to the franchisor’s operations manual, computer systems, and other items designed to help you successfully manage your accounting and financial services business. Remember the franchisor can’t be successful without you!
Keep in mind, though, many opportunities in this field aren’t technically franchises.
During your search for an accounting and financial services franchise, you will encounter a closely related kind of business type: a business opportunity.
A business opportunity (sometimes referred to as a “bizopp”) is the sale of a system the licensor has cultivated and is confident will be profitable when replicated, similar to a franchise. However, once the purchase is finalized, and training—if offered—is completed, the relationship is usually over. Because they usually don’t come with the typical training and ongoing support franchises offer, business opportunities tend to cost significantly less than franchises.
However, just because it’s classified differently doesn’t mean that a business opportunity can be any less fruitful than an opportunity classified as a franchise. Both require the buyer to be dedicated and hard-working to find success.
Both of these approaches to making a business investment are suitable for those who don’t have their own unique product or service to bring to the marketplace, but still want to run a business. The greatest distinguishing factor between the two is how much support you desire.
If you’re simply looking for a jumpstart and desire more flexibility, a business opportunity could be the route for you. If you’re looking for consistent support, and can handle more restrictions (or desire more guidance) in the procedures of your business, a franchise might be the path for you.
You can also check out many more exciting opportunities, such as Bookkeeping and Taxation Franchises, here on Franchise Direct.