What You Should Know About Franchise Accounting? When running a business, your first priority should always be to stay afloat and, ideally, make a profit. To do so, you must keep track of your finances and understand your expenses as well as your cash flow. Accounting can help with this. Whether you own a small pizza shop or want to start your own franchise, proper accounting and bookkeeping are critical components of running a successful business. Franchise accounting is, for the most part, the same as non-franchise accounting, but there are a few differences to be aware of. If you're new to entrepreneurship and need assistance getting started with franchise accounting, you've come to the right place. We'll go over everything you need to know about franchise accounting, including how to do it yourself and when to hire a professional. What Exactly Is Franchise Accounting? Let us begin by defining accounting. Accounting is simply keeping track of your company's financial transactions. So, if you close your pizza shop for the day, count the money in the register, and record it in your financial records, you're accounting. The same basic accounting principles apply to a franchise business: you're still keeping records of your financial transactions, but with franchise accounting, you're doing it in the context of a franchise. Why should this be given its own designation rather than being lumped in with accounting in general? Franchises have several distinct fees and expenses that are not present in non-franchise situations. Furthermore, when it comes to hiring a professional, some accountants specialise in franchises, so be specific about what you're looking for. How to Go About It Let's get down to business: how exactly do you account for a franchise? There is no simple solution. Professional accountants usually have a bachelor's degree in accounting or a related field, as well as a professional certification. Accounting for a franchise can be complicated, and you may need to hire a professional. The application of accounting to franchises is known as franchise accounting. It functions similarly to non-franchise accounting, but it takes into account the unique fees associated with franchises, such as royalty fees, amortising initial fees, and marketing fees. Although franchisees can learn accounting on their own, hiring a professional accountant is often a good idea. This can assist franchise owners in avoiding mistakes, getting their business off to a good start, staying aware of risks, and saving time so they can focus on other aspects of their business. Get in touch today for your real franchise bookkeeping needs

1. Bookkeeping
for a Franchise
Business.
MERU ACCOUNTING SPECIALIZES IN

2. We have a planned
accounting policies model
to meet client
requirements effectively
and accurately.

3. Franchise business is like a branch or
start-up industry
Various entities such as a franchisor, franchisee and other regulatory
authorities function in this business.
franchise organizations require
reporting of statements.
They base it on the specifications laid down by the parent
company and other regulatory authorities like the ‘Federal
Trade Commission’.
franchisor is required to share details
and documented information
for accounts to the respective franchises that he uses as a
reference and for updating.

4. How to Do
Accounting for a
Franchise
Business?
Franchise business has its own
accounting model to report
requirements.
01
They maintain a standard chart of
accounts that is used by all the
franchisees.
02
Need to frame a policy for writing
off of onetime franchise fees.
03
The profitability in such a business
is generally a certain percentage of
the revenue earned.
04
Some accounts typically used
Franchise Royalty fees, Franchise
Fees Amortization.
05

5. Profitability with a
franchise system
Profitability is a fixed portion of revenue
franchisee calculated in percentage
form.
It is a fixed percentage of the revenue made by an
organization.
It is also important to set fees based on
the ability of the franchise industry
to incur the start-up costs so as to provide working under a
brand name and its products and services.
Franchisee’s convenience and the
requirements of the franchise
organization and parent company.
Two of the most basic account management techniques are
‘franchise royalty fees’ and ‘franchise fees amortization’.

6. Thank
you!
For clarifications about any
part , please send a message!