No matter how much you love the idea of owning a business, it’s important to assess the financial potential of the franchise. The financial due diligence stage of buying a franchise is where you work out what it will cost to buy the franchise and operate the business. Once you know the costs, you can work out your sales target and assess whether it’s achievable. Good financial due diligence helps reduce the risk of investing your money in a business that can’t deliver the financial results you need.Financial due diligence is the process of investigating the financial potential of the franchise you’re interested in and understanding the financial risks. It’s a good idea to get advice from an expert franchise accountant, however it’s also important to know what questions to ask. In this article we’ll highlight some of the important questions a franchise buyer should consider as part of their financial due diligence.
Five key questions for your financial due diligence
Kate Groom is co-founder and director of Franchise Accounting and Tax. She has previously worked for franchisors and as a business adviser. Kate’s focus is on helping clients understand the financial aspects of running a business and on business planning and coaching. She is also a director of a number of ‘not for profits’. https://www.franchiseaccountingandtax.com.au/
