CBCS Financial & Credit Management
  CBCS FRANCHISE AUDIT                     
 
So why Franchise Audit?
 
Our franchise audit services are designed to:

 Find the errors and omissions
                                                             
 Detect the franchisee’s methods of bucking the system

• Correct any admin process which is giving rise to inaccuracies.  

A programmed series of random audits against both your good performers and your bad performers, your bona fide franchisees or those out to defraud you, will not only recover unpaid fees; it will also send a message to your franchisee network... “Tidy up your admin or we will do it for you!”

A typical audit would consider (some or all) of the following financial records:
  • Printed invoices
  • Remittance advices
  • Paying in book
  • bank statements
  • payroll records
  • purchase invoices
  • supplier payment details
  • cheque books
  • management accounts
  • computerised/manual accounting records
  • year end accounting records
  • year end payroll records
  • VAT and tax records
  • other relevant records
Following the site audit and on completion of our investigations we will generate a report. Where there are errors or omissions and there are inadequacies in the processes involved, the report will flag these under recommendations. If there are discrepancies or even abject failure, the report will state this and advise action required by the franchisee to remedy. The process can be closely controlled by you, with the precise brief and method for the audit agreed in advance. For each audit, our comprehensive reports are delivered to your desktop within 48 hours.

Furthermore, if you have clauses within your franchise agreement which indemnify you in the event of mis-declaration or breach, then you could recover the full cost of the audit and much more. 
 
We can select the franchisees to be audited at random (subject to the franchisees final approval). This removes the 'conflict of interest' from the franchisor and allows you to concentrate on the growth of your franchise network; confident that your franchisees are in compliance.

Of course, this may seem quite a hard-line method of dealing with the issue. With that in mind, we offer a wide variety of different auditing options, tailoring our audit service to your precise requirements, even offering advice to your franchisees to help them carry out their obligations to you more effectively:


Our Audit Services

Standard Audit - This is our standard audit comprising an analysis of all sales transactions in a set period and a general assessment of admin and financials (up to 5 hours on site). The cost: As little as £500 per audit.

Discovery and Recovery Audits.  Discovery audits are carried out as a series of audits in the franchisor
network selected at random but which will include a ‘target’ franchisee. These audits last a maximum of 
3 hours and are based on random sampling of up to 20 sales transactions together with assessment of admin and financials. The cost: As little as £350 per audit.  Discounts are available of £50 per audit for more than 5 discovery audits booked in one go. If after the Discovery Audit, further investigation is required, a Recovery Audit can take place. This will involve an analysis of every sales transaction in a given period. The cost: As little as £300 per audit.

Franchisee Business Review -  Where the review/audit is deemed to be of assistance to your franchisee, we can carry out an audit behind the scenes, whilst the review takes place. The franchisee need not know that the audit is taking place. The cost: As little as £500 per audit

Franchise Return and Document Collection - An alternative to Audit. This is an e-mail driven collection service for:

• Monthly Management Reports/Returns/Fees (MSF)
• Annual submission of year end accounts to Franchisor
• Quarterly submission for VAT Return reports to Franchisor
• Collation of reports, accounts and VAT returns against declared revenue to verify sales
 
How many of your franchisees fail to submit their returns on time and how many fail to submit year end financials or copies of VAT returns submitted as part of their franchise agreement contractual obligations. 

The returns or declarations are critical to your business as of course is the MSF or royalty itself. We offer a polite e-mail driven collection service that reminds the franchisee of their obligations. 

But even if your franchisees send their returns and fees in on time, do you know how well their business is doing? You can carry out a franchise audit or a franchisee business review as above, but for a more cost effective alternative, we can chase the year end submission of year end accounts and/or copies of their quarterly VAT returns. For as little as £25 per franchisee we can collect and submit these directly to you. We can also collate and cross reference against their submitted returns, highlighting immediately and showing franchisees where further investigation and potentially an audit or review may be appropriate. 

International Franchise Audit Are you a UK Franchisor with international Franchisees? Are you concerned that they are not disclosing their sales properly and are you missing out on MSF or royalty revenue?

Whilst the auditing issues are the same, this is a potential minefield, with language, cultural and geographical barriers making it difficult to police and potentially very costly. It need not be: International Franchise Audit - keeping the costs down...
 


Would you like to know more?

You can contact us by e-mail, phone or use on on-line form - Contact Us