Income Wreck-ognition: Part IV

Income Wreck-ognition-Part-IV

Need some more background? Check out Income Wreck-ognition: Part I and Part II. and Part III: Survey Maximizing Income Recognition with Your Outside Auditors The adoption of the new income recognition standards will affect most franchisors as they pursue their 2019 audit in time to issue their FDD in 2020. The effort to maximize income recognition is not an all-or-nothing game. Based on our experience, auditors are all over the

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CA AB 5 Campaign Plan & Fundraising Effort

I wanted to give you an update on what’s going on in California related to AB-5. The background appears below.  As things stand now, AB-5 goes into effect Jan. 1, 2020, but IFA believes that a franchise exemption is possible. Based on the criticism of several industry sectors, when the California Legislature reconvenes in January 2020, the bill’s sponsor, Assemblywoman Gonzalez has stated that she will introduce a follow-up to AB-5 to address

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Income Wreck-ognition-Part-III

Income Wreck-ognition-Part-III

Need some more background? Check out Income Wreck-ognition: Part I and Part II. As we have worked with some of our 200 brands, we have noticed a pattern among auditors – the pattern being that there is no pattern. The more parochial firms categorically reject the concept of recognizing any income upfront and require the entire initial fee to be amortized. Others seem to go through the appropriate exercise: the

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Income Wreck-ognition-Part-II

Income Wreck-ognition Pt.II

Did you miss Part I? Check it out here. Given the robust activity around my recent post on Income Wreck-ognition, I think I have your attention. As a refresher, the upcoming changes in auditing practices require a franchisor to amortize the initial franchise fee over the term of the franchise agreement – unless it relates to any “distinct” performance obligations. The effect could be to reduce your income recognition by

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Income Wreck-ognition

Income Wreck-ognition

We are just around the corner from the deadline to comply with the new income recognition rules, which will likely “loot” much of the capitalization of an emerging franchisor.  The restatement will likely have the effect of driving many rapidly growing franchisors’ capital into the negative — jeopardizing (un-impounded) state registrations and impairing franchisee diligence. Here’s what up tarting with the 2019 audit (for privately held companies), all initial fees which

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Motivating Franchisee Compliance

Motivating Franchisee Compliance

It’s never too early for an emerging franchisor to start thinking about franchisee compliance. Lauren Coe, CEO and owner of Snapology, remembers all too well being at her first Springboard and brushing off calls from other, more experienced franchisors to prepare for dealing with uncooperative franchisees. Coe admits regret at not having taken the message more seriously several years ago. “I sat here like you,” she said to fellow franchisors

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Item 19: Using Your FDD as a Sales Tool

Item 19: Using Your FDD as a Sales Tool

Deciding whether to provide financial information in an Item 19 can be a challenging process for emerging franchiors.  You want to have a good answer when a prospective franchisee asks the question “how much can I make?” In the panel titled “Item 19: Using Your FDD as a Sales Tool” at the Springboard Conference in Philadelphia on September 19, 2019, several experts discussed the benefits of providing an Item 19

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Panelists Offer Insights into How Investment Professionals Evaluate Franchise Systems

Panelists Offer Insights into How Investment Professionals Evaluate Franchise Systems

On day two of Springboard, conference participants heard from a panel of investment professionals, accountants, and franchise operators eager to share their expertise on franchise-specific financial matters. “For what do private equity groups and banks look when evaluating a franchise as an investment opportunity?” asked panel moderator John Goldasich, of Arlington Capital Advisors. The work that goes into a transaction can prove long and difficult, according to Rob Sharkey, CFO

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YoungConference Preview – Telling a Story through Social Media

YoungConference Preview Telling a Story through Social Media

Last month at the annual Franchise Springboard conference in Philadelphia, a group of panelists consisting of franchisors and social media experts convened to preview an upcoming event – the first annual Franchise YoungConference. The YoungConference will take place next month on November 4th and 5th in Miami Beach, Florida. It will be a place for young and young-minded go-getters in the franchising community to gather, network, and share what they

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Change the Course of Your Emerging Brand: The Female Leadership Perspective

Change the Course of Your Emerging Brand: The Female Leadership Perspective

On Thursday, September 19, 2019, Springboard conference attendees were invited to a panel discussion titled “Change the Course of Your Emerging Brand: The Female Leadership Perspective”. The panel, moderated by Sherri Fishman, President of Fishman PR, sought to explore the unique leadership and emotional intelligence skills inherent to female executives in the franchising world. The panelists included: – Liberty Bernal, COO of Baby Boot Camp; – Karissa Johnson, CEO of

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