Franchises

PoodlePoodle Experienced MentorPosts: 711Registered
Hi,

Is there anything funny that I should be aware of with a company that sells franchises for cleaning equipment and then charges an annual fee as a license fee?

Both on the accounting and taxation side.

Poodle

Comments

  • groundygroundy Trusted Regular Posts: 495Registered
    Nothing unusual that I am aware of. However, having dealt with Franchisors and Franchisees, I usually advise clients to stay well away from entering into a franchise. I know it is a sweeping statement but from my experience the only person who ever makes money is the Franchisor, when it is the Franchisee that does all the work.

    Even more annoying is that banks fall over themselves to lend franchisees money when someone with a great business idea but starting on their own has to jump through hoops.
  • MonsoonMonsoon Font Of All Knowledge Posts: 4,071FMAAT, AAT Licensed Accountant
    groundy wrote: »
    Nothing unusual that I am aware of. However, having dealt with Franchisors and Franchisees, I usually advise clients to stay well away from entering into a franchise. I know it is a sweeping statement but from my experience the only person who ever makes money is the Franchisor, when it is the Franchisee that does all the work.

    Even more annoying is that banks fall over themselves to lend franchisees money when someone with a great business idea but starting on their own has to jump through hoops.

    Exactly what I was going to say! You only have to read a few threads on www.ukbusinessforums.co.uk about franchises to see how often people get burned.
  • PoodlePoodle Experienced Mentor Posts: 711Registered
    Thank you both for your resonses.

    Since this is a fanchisor, should be ok.
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