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Franchise audits are vital for maintaining the financial health of your business. However, many new franchisors find this process challenging, struggling through it due to a lack of preparation and understanding of what it’s all about. This can lead to compliance issues, financial discrepancies, and even damage to the brand’s reputation.
So, what exactly is franchise auditing? How does it work? And why is it so important for the financial health of your franchise business?
In this episode, Stacy Farber and I discuss how to prepare for a franchise audit, what to expect, and strategies for managing your franchise's finances as it grows.
Stacy brings over 25 years of experience in audit and financial leadership experience to her engagements. She is the Connecticut Audit and Attest Practice Leader. and has extensive experience completing financial statement audits, single audits, and reviews and compilations for multiple industries, including franchising entities.
We discuss: (timestamps)
02:26 What is a franchise audit?
04:20 What auditors look for in financial statements
08:00 What negative equity means for your franchise
10:02 How revenue recognition affects your financials
12:56 How long does a franchise audit take?
14:38 How far back should auditors look?
16:45 How often should you do franchise audits?
17:48 What to do if your franchise sale gets denied
18:49 Cash vs. accrual accounting
25:54 Common issues in franchise audits
27:41 Best practices running a franchise
34:03 Actionable tips to get your business franchise audit ready
Resources:
LinkedIn:
https://www.linkedin.com/in/stacy-r-farber-cpa-9a3722/
Related Episodes:
How to Turn Your Business Into a Successful Franchise
How to Pick the Right ERP
Kathy Svetina, Fractional CFO:
https://www.newcastlefinance.us/
Blog post | How to be Franchise Audit Ready
https://www.newcastlefinance.us/listen/how-to-be-franchise-audit-ready/
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