Canada Master Franchise Prospectus

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Canadian Franchise Prospectus 2015

Please note that this document provides only summary information about the history and operations of TaxAssist Direct Ltd. in the United Kingdom and it has not been verified for Canada. TaxAssist Direct International Ltd will provide prospective master franchisees with a disclosure document in accordance with applicable provincial law.

No representation, warranty, condition or guarantee is made with respect to the possible success of the master franchise program or the sub franchise program in any jurisdiction, which will be largely dependent upon the business ability and skills of the prospective master and franchisees. The prospective master must conduct an independent investigation of the business described herein.

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Executive Summary

Following on from their continuing success in the UK Market and having awarded their first

Master Franchise Rights for Ireland, TaxAssist Direct Ltd (TAD, which includes a reference to

its affiliates where appropriate) are offering their Master Franchise Rights in certain markets.

Rather than attempting to establish, support and administer a network of Franchisees

themselves, TAD has decided to offer for sale their Master Franchise Rights for set territories.

The Master Franchisee will then assume responsibility for establishing a network of

Franchisees, replicating the business model and support that TAD provides to their own

network of Franchisees in the UK.

TADI or its affiliates will provide ongoing training and business consultancy to a network of

Master Franchisees.

TaxAssist Direct Ltd Experience TaxAssist Direct Ltd (TAD) is the Franchisor for the TaxAssist Accountants network. With no accountancy practice of its own or other business concerns, the sole function of TAD is that of a training, marketing and support company servicing a network of franchised accountancy practices. Established in 1995, TAD has developed a strong brand and a robust business model. Each Franchisee provides a comprehensive range of accountancy and taxation services to small businesses (the self-employed, sole traders, partnerships and Limited companies) and personal income tax payers. TAD was founded with the specific remit to service small businesses (defined as self-employed / sole traders and companies with a turnover of less than £2 million) as this is a lucrative and growing sector that is usually under serviced by the traditional accountancy practices. TAD has gone through a period of change and has revolutionized accountancy practices in the UK by creating a retail experience with customer friendly shop front premises which strip away the mystery and intimidation, something from which traditional practices can suffer. TAD currently has over 80% of their UK network trading from retail (shop front) based locations which, coupled with industry leading marketing strategies and the one-stop-shop services provided in-house along with additional service partners, gives TAD a powerful edge over the competition. All TAD Franchisees are committed to moving into retail based premises within three years of the commencement date on their Franchise Agreement. TAD enjoys full membership status with the British Franchise Association, Irish Franchise Association, Canadian Franchise Association and the Franchise Council of Australia and is proud to support and adhere to their Code of Ethics. TAD is a multi-award winning franchise. 2014 started off well after TAD was awarded ‘Most Innovative Tax Team of the Year’ by Acquisition International. These global awards recognize the outstanding achievements of individuals and companies within the tax industry, and crucially, are nominated by clients, professional relationships and peers. The awards are given solely on merit and are awarded to commend those most deserving for their ingenuity and hard work over the last 12 months distinguishing them from their competitors and proving them worthy of recognition.

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TAD were ranked first place in the 2010 BFA/HSBC Franchisor of the Year Awards beating eight finalists to the Gold Award which included McDonalds and Domino’s Pizza. This followed on from winning the Silver Award in 2008 and 2009, which is unprecedented. In addition, in 2009 their Franchisee Mark Fordham won Bronze in the Franchisee of the Year award. In 2013 TAD won a number of awards and accolades including ‘Accountancy Firm of the Year’ from AIA (Association of International Accountants) and ‘Best UK firm supporting apprentices’. For the last four years, TAD has participated in ‘The Best Franchise Awards’ based on an independent franchisee benchmark survey. In 2013 for the third year running TAD were awarded first place in the ‘Best Training and Support’ category. In 2014 TAD won the ‘Best Franchise’ award in their category and also a ‘Continuous Improvement’ award designed to recognise franchisors that have improved their Franchise Satisfaction Survey results for at least two years running. They were ‘Best Large Franchisor’ in 2012 and runners up in 2013, again beating fellow finalist McDonalds in both categories. In addition to these awards, TAD were also awarded ‘5 star franchisee satisfaction’ as recognition for receiving better than average feedback in all key areas, joining as the organisers of the award put it “an elite group of the UK’s best franchisors.” In addition to the franchise industry awards, TAD has also won various marketing awards. In 2013 TAD beat the UK’s top ten firms on growth in the national league tables beating the “Big 4” international groups and achieving the fifth highest percentage growth across the whole Top 50. The network was placed 25th in the 2014 Accountancy Age Top 50 league table on UK fee income, up 9 places from when they first appeared in the 2010 report. In August 2014 a Management Buyout of TAD and other companies within the TaxAssist Group, including TADI, was completed with a new company TaxAssist Group Ltd acquiring, amongst other shares in other companies in the TaxAssist Group, 100% of the entire issued share capital of TAD and TADI. The Management Buyout was supported by the three Executive Directors of TAD as well as investors with whom TAD has had long working relationships, Franchisees and staff throughout the TaxAssist Group.

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TaxAssist Direct Ltd has an Experienced Executive Directorate of Three:

Chief Executive - Karl Sandall FCIB, QFP

Karl spent 26 years at a senior level with HSBC before joining TaxAssist

Accountants on 1st January 2000 as Operations Director – taking on the

role of Chief Executive in 2002. A Fellow of the Chartered Institute of

Bankers, a member of the Financial Industry Group and of the Committee

of the IFS School of Finance for the East of England, Karl oversees the

running of the company and the whole network on a day to day basis and

ensures the company continues to expand. Karl has been awarded the

British Franchise Association Qualified Franchise Professional (QFP)

qualification in recognition of his expertise in ethical business format franchising.

Business Development Director – Sarah Robertson MSc, Dip M, Chartered Marketer, FCIM FIDM

Sarah has over 20 years’ experience in the marketing and advertising

industry, working with a broad range of national and regional brands such

as the British Red Cross, Norwich Union, Oracle, Del Monte, the Imperial

Cancer Research Fund and Swinton Insurance along with her own

successful business. She is a Fellow of the Chartered Institute of Marketing

and a Fellow of the Institute of Direct Marketing. Sarah joined the TaxAssist

Accountants’ Board on 1st September 2004. Sarah is responsible for

marketing strategy, brand development, shop fronts, practice management and business

development strategies for Franchisees. Sarah was named the 2007 & 2010 Marketing Person

of the Year by the 2020 Innovation Group and runner up in 2009.

Network Operations & Finance Director - Phil Sullivan BSc (Hons), ACIB

During a 26 year career with HSBC Bank plc Phil achieved Executive

Management status and undertook roles covering a wide range of

disciplines. Prior to leaving HSBC Phil was Area Director for

Leicestershire, a role with responsibility for all aspects of the bank's branch

banking & commercial business in the county and corporate banking

activities in the East Midlands. Phil established his own business in 2006

providing corporate and commercial advisory services to selected

business clients. After working with TaxAssist Direct Ltd for 18 months on a consultancy basis,

Phil joined the Board as a full-time Executive Director with effect from 1 October 2008. His

responsibilities include overall technical competency and compliance of the Network and

Support Centre, internal financial control and operational integrity and training.

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Non - Executive Director – John Chambers

John has specialised in franchising for over 20 years. He thinks of himself as a business man first and a solicitor second. His "no nonsense, practical, commercial approach" is appreciated by clients as much as is his unrivalled knowledge of the franchising sector.

He read law at University College London and worked in the City of London for Mitsui, a Japanese trading company, and in the Middle East for Turner & Newall Plc.

John then worked in sales and contract management roles in the oil industry, first in the UK and then abroad before deciding that he could provide more commercially focused and practical advice than he was receiving from lawyers. He re-trained as a solicitor and worked for two leading international law firms prior to setting up Chambers & Co in 1998. After establishing himself as one of the UK’s leading franchise lawyers and acting for 20% of the franchisors in the UK, Ashton KCJ acquired the practice in early 2012.

John is a former member of the now disbanded British Franchise Association Legal Committee, and regularly speaks on franchising law both at home and abroad.

Non – Executive Director – Mark Fordham

Mark’s career has been spent entirely in the Financial Services industry. He spent the early part working for NatWest Bank in Retail, Corporate and Investment Banking including spells in Corporate Lending and the Training department where he taught Financial Analysis (Balance sheets, cashflow forecasts, profit and loss accounts and bookkeeping). He also taught Investment Management including personal tax at degree level for 14 years. The latter part of his banking career was spent qualifying as an auditor and then planning and managing a team of 150 auditors to run audits across the Royal Bank of Scotland Group.

Mark was awarded his TaxAssist Accountants franchise is 2003 and built up a client base in St Albans and Harpenden in Hertfordshire. He won the TaxAssist Fastest Growth Award 3

years in a row as well as Accountant of the Year and the British Franchise Association Bronze award in 2009. In 2012, 9 years after starting his franchise, he sold the business with 900 clients to an incoming franchisee.

Mark joined the board in January 2015.

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Ireland

In February 2009 TAD awarded its first Master

Franchise License to the Republic of Ireland (ROI).

The Master Franchise Rights were awarded to an

established accountancy practice (principles being

Certified Public Accountants) that was already

successful in its own right but wanted to grow

nationally and saw the value in the TAD brand,

experience and support.

TaxAssist Accountants Ireland is managed by a team

of three full time Directors who are supported by personnel from their existing practice.

TAD worked closely with the UK and Irish banks to ensure that, even in times of deep recession

when banks were reluctant to lend, they became supportive of the TAD model. Funding is now

available for Sub-Franchisees.

TAD enjoys close relationships with the banks in the UK and ROI and is able to provide

references to prospective Master Franchisees and the Franchise departments of their banks

which demonstrate the strength of the TAD proposition.

Canada so far

In January 2014 TAD successfully delivered their Master Franchisee training to a Master taking

on the rights for the Greater Toronto area of Ontario in Canada. TAD continues to receive a

high level of interest in the 4 remaining Master Franchise territories in Canada and potential

masters from Alberta and British Columbia visited Norwich in August and November 2014.

Master Franchisee – Rina Mancini, B.A.S., MBA

Prior to becoming the Master Franchisee for TaxAssist in the GTA, Rina Mancini held strategic leadership roles with Manulife Bank of Canada, Equifax Canada, Sears Bank and Rogers Communications. An experienced business executive, leader and strategist, Rina has extensive depth and breadth of experience within the Financial Services, Telecommunications and Information Solutions industries. Her experience spans Consumer Credit Risk Management, Accounts Receivable

Management, Call Centre Management, Operations, Customer Service, Finance, Change Management and Process Improvement. With Rina’s acquisition of the Master Franchisee licence for the Greater Toronto Area, she looks forward to introducing and growing the TaxAssist brand to Canada and to establishing a network of franchisees within the GTA.

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International Franchising

Having proven that the concept can be replicated in the Republic of Ireland and that ongoing

training and consultancy support can be given to a Master Franchisee, TAD is in a position to

be able to offer its Master Franchise Rights to selected international markets.

Whilst there are many differences between the UK and the target countries, both cultural and

legal, there is one constant – every country has a high number of small businesses and self-

employed individuals that have to pay tax and are in need of a professional accountancy

service.

The TAD branding, marketing, training, support functions & shop front concepts lend

themselves to Master Franchising; being one of the UK’s leading Franchisors, TAD is able to

demonstrate their ability to recruit and support Franchisees and the strength of the business

model.

The TaxAssist Accountants Market

The accountancy market is dominated by four accountancy firms, PriceWaterhouseCoopers,

Deloitte & Touche, KPMG and Ernst & Young – all of which are global organisations. These

firms audit almost all of the top 100 public companies and the majority of the top 350

companies. Beyond the ‘big four’ there are many mid-tier and smaller firms.

For TAD franchisees, the target market is small businesses, defined as those with a turnover

of less than £2m. In the UK, the Department for Business Innovation & Skills (BIS) does not

have a single definition of ‘small business’ but use it to refer to the range of small and medium

size enterprises (SMEs).

BIS provide the following UK statistics:

4 million small businesses – in excess of 90% of all UK business

3 million self-employed people

2.3 million sole traders

600,000 partnerships

900,000 SMEs

TAD believes that the small business market has been neglected by the traditional

accountancy practices. This gives us a unique opportunity through our national branded

network to provide services to a largely untapped market.

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The Canadian Market

As of 2012, there were just over 1.08 million small businesses in Canada that had

employees (excludes self-employed entrepreneurs and indeterminate businesses).

98% of businesses in Canada have 1 to 99 employees. ‘Statistics Canada’ define a

small business as having annual total revenue between $30,000 and $5 million.

In 2011 there were 2.67 million self-employed workers, representing around 15.4

percent of total employment in the Canadian economy.

Target Markets

Based on the principle that a standard single unit territory has a population of up to 75,000,

TADI is offering Master Franchise Rights covering an area with a population of circa 4 million

which will result in up to 40+ single unit territories for the Master Franchisee to award, support

and administer.

For regions with a larger population, and where the prospective Master Franchisee is able to

demonstrate their ability to manage a larger scale business, TADI can offer larger territories

with an additional fee per 1 million of population up to a maximum territory of 12 million.

The anticipated pricing structure is broken down into two elements; a fee for territory licence

and a separate fee for the support provided to the Master Franchisee by TADI.

For a population of up to 4 million the territory licence fee is calculated as £75,000 with a pro

rata increase in the fee for a larger territory. For example, for a territory with a population of 6

million the territory fee will be £75,000 X 1.5 = £112,500.

The support element of the fee will vary dependent on the level of support required and the

costs involved to TADI. The support fee will vary from £75,000 to a maximum of £125,000.

Factors including geographical location, translation requirements and potential re-branding will

affect the support fee and will be discussed with a prospective Master Franchisee.

TADI has initially identified the following countries as prospective markets:

USA

Canada

Australia

New Zealand

Other markets will be considered on an individual basis.

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As per Statistics Canada, the total population in 2013 was 35,158,000 though there are only 4

provinces with a population of circa 4 million plus. These are:

Province Population Masters

Ontario 13,500,000 2

Quebec 8,100,000 2

British Columbia 4,400,000 1

Alberta 3,600,000 1

Total 29,600,000 6

With a population of 29.6 million TADI believes that these provinces would yield up to 6 Master Franchises and collectively in excess of 350 single units. The proposed minimum Franchise Fee for a Single Unit is the equivalent of £34,950 plus local taxes as applicable.

The role of the Master Franchisee The key roles of the Master Franchisee will be:

Establishing a pilot operation

Recruiting Franchisees within their territory

Training – both initial and ongoing

Technical support including helpdesk and field support

Marketing & business development support

Brand protection

Network administration

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Master Franchise Package TAD or its affiliates will deliver full training split into two programmes. The first programme covers owning and operating a TaxAssist Accountants single unit Franchise as detailed in the UK prospectus whilst the second programme will train the Master Franchisee on how to recruit, develop and support a network of Franchisees. Course content for programme two will include:

Recruiting Franchisees

Setting up Franchisees

Initial training for Franchisees

Managing Franchisees

Ongoing development for Franchisees and continual professional development

Network administration

Strengthening the network

Brand development

Strategic partners TAD has a support center of dedicated professionals all focused on supporting the UK network of single / multi-unit Franchisees. As TADI international grows, the Directors are committed to, where necessary, recruiting specialists in international franchising to ensure that the UK business does not suffer. TADI is focused on not just awarding Master Franchise Rights but working with the Master Franchisee on a long term basis. Whilst not providing technical support directly, TADI or its affiliates will provide comprehensive ongoing consultancy advice to the Master in establishing systems for:

Ongoing training programmes

Establishing help line facilities

Support website

Support personnel visits

Regular communication

Marketing initiatives

Franchisee recruitment

Business coaching Details of the set-up, training and support packages will be available in the Franchise Disclosure Document.

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TO FURTHER SUPPORT THE MASTER, TADI WILL:

Appoint a support person who is experienced in franchising to be responsible for the primary contact with the Master Franchisee

Arrange visits to the Master Franchisee during the crucial set up and initial trading period

As detailed previously, a Master Franchisee will have a territory of circa 4 million in population giving them up to 45 single unit Franchises to offer based on the principal that a population of 75,000 makes up a single unit territory. As detailed previously, the planned Franchise fee per single unit is the local currency equivalent of £34,950. The Master Franchise fees are proposed as:

Territory fee £75,000

Support fee £75,000 to £125,000

MSF on Sub Franchise fees 10%

MSF on own MSF received from Sub-Franchisees 25%

All other fees detailed in the Franchise Agreement 25%

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Achievements 2014

Smith & Henderson Awarded the 5* Franchisee

Satisfaction Recognition Award

2014

Smith & Henderson Continuous Improvement Award

2014

Smith & Henderson Best Franchise Award

2014 British Franchise Association

2014 Most Innovative Tax Team

of the Year ‘Winner’

2013 Best UK Accountancy Firm

Supporting Apprentices

2013

Smith & Henderson Best Franchise Award

‘Best Training & Support’

2013

Smith & Henderson Best Franchise Award

‘Best Overall Franchise’

2013

Smith & Henderson Awarded the 5* Franchisee

Satisfaction Recognition Award

2013 British Franchise Association, Franchisee of the Year Award

Finalist

2013 Association of International

Accountants ‘Winner’

2013 Unbiased.co.uk’s

Media Adviser Awards ‘Professional Adviser

of the Year’ Awarded to Jo Nockels,

Communications & Training Manager

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2012 Smith & Henderson

Best Franchise Award ‘Best Large Franchisor’

2012 Smith & Henderson

Best Franchise Award ‘Best Training & Support’

2012 British Franchise Association,

Franchisor of the Year Award:

Selected Finalist

2011

Eastern Daily Press Business Development

Award Winner

2011 Best Franchise Award Best

Training & Support

2010 British Franchise Association

Franchisor of the Year

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In 2010 TaxAssist Accountants were the British Franchise Association Franchisor of the Year GOLD WINNERS

TaxAssist Accountants faced tough competition from the seven other shortlisted finalists including household names such as Domino’s Pizza and McDonalds. This award win followed two Silver place wins for the small business accountancy specialists. Winning an award for a third consecutive year at this prestigious event confirms that TaxAssist Accountants continues to be one of the major players in the franchise world.

Karl Sandall, Chief Executive of TaxAssist Accountants, collected the award on behalf of the company from Brian Smart, Director General of the bfa at a gala ceremony held in Nottingham. Karl is justifiably proud of their success and comments “Being named as 2010 bfa HSBC Franchisor of the Year is extremely exciting and is recognition of how we've adapted our business and shaped our future plans for the benefit of all 180 of our franchisees. We provide them with the support they need, whatever and whenever it may be, to make their business as successful as possible."

"Judging the finalists was tremendously difficult as so many franchisors have shown innovative

ways in which to survive and prosper despite the economic downturn. TaxAssist clearly

demonstrated unique and exciting business success and is a deserving winner of the bfa

HSBC Franchisor of the Year Award.”

Cathryn Hayes, Head of Franchising, HSBC

"The affect of the recent economic conditions has been a constant threat for franchisors and

franchisees alike. However, it has been a delight to recognise and award some truly

outstanding franchisors for their strategic direction and support for their franchisees.

"By being named as one of the winners, the franchisors have been recognised as being the

best in industry for customers, suppliers and potential franchisees. It can also help further

motivate their own franchisees by recognising their hard work and dedication. “

Brian Smart, Director General of the bfa

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“Being named as 2010 bfa HSBC Franchisor of the Year is extremely exciting and is

recognition of how we've adapted our business and shaped our future plans for the benefit of

all 180 of our franchisees. We provide them with the support they need, whatever and

whenever it may be, to make their business as successful as possible."

Karl Sandall, Chief Executive TaxAssist Accountants

“Just a quick email to say congratulations to everyone at TaxAssist for winning the Gold award.

I have spoken to current clients, potential clients and people I am networking with about this

achievement and they are all very impressed. I am so pleased that I chose to become a

TaxAssist accountant rather than try to start up on my own from scratch. Winning awards like

this confirms I made the right decision and it has certainly given me even more of a boost to

reach my targets. Very well done once again’.”

Ron Mansfield TaxAssist Accountants, Romford

“Many congratulations on the great achievement of the Gold Award. It is something that we in

the field have known for a long time that as a Franchisor you are Number One.

Best wishes to all at Norwich.”

Jonathan Berks TaxAssist Accountants, Royston

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Next Steps

If you would like to take your interest further, you will need to contact David Paulson on 01603

447402 or [email protected] and if appropriate you would need to arrange to visit

with us in the UK. The UK visit will involve Discovery Day presentations, covering the business

model, shadowing support centre personnel and meetings with the Directors to discuss the

opportunity in greater detail.

The visit may also include a tour of UK Franchisees and a visit to Ireland to meet with our

Master Franchisee to see firsthand how we have assisted them in setting up their operations.

Your only obligation is getting yourself to the UK, once here we will arrange your airport

transfers and accommodation whilst you are with us.

The discovery day and subsequent meetings are not a hard sell and there is no obligation to

join us after visiting. The sessions are a two way process to establish if we can work together.

Once you have visited with us we will invite you to conduct your own research on the potential

business within your territory whilst we both complete due diligence on each other.

We welcome questions on any issue connected with our Franchise as we want you to be

completely satisfied with our concept so you can feel confident and fully committed to our

business relationship. Feel free to contact us for any information you require. We look forward

to hearing from you.

TaxAssist Accountants Master Franchise Rights Prospectus (Canada) v1.13 February

2015 ©TaxAssist Direct Ltd, Figures and statistics correct as of February 2015 Please

note that this is a Sales Document only and that none of the information for the

Canadian market has been verified, formal disclosure document that complies with the

relevant Canadian and provincial laws will be made available upon request.