New Zealand Master Franchise Prospectus

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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 and the Greater Toronto Area of Ontario,

Canada, TaxAssist Direct Ltd (TAD, which includes a reference to its affiliates where

appropriate) are offering their Master Franchise Rights in markets deemed suitable for

international expansion.

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

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.

TAD will be committed to providing ongoing training and business consultancy to a

network of Master Franchisees.

©TaxAssist Direct Ltd, Figures and statistics correct as of December 2014

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

New Zealand market has been verified. The prospective master must conduct an

independent investigation of the business described herein.

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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 (self-employed, sole traders’ partnerships and Limited companies) and personal

income tax payers. As of December 2014, the UK network of almost 200 franchisee areas

has a combined fee bank in excess of £35 million from over 52,000 clients.

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 and Irish Franchise Associations, the

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. 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’.

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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 recording a 12.4% growth in the Accountancy Age Top 50 listings, beating the “Big 4” international groups and achieving the fifth highest growth across the whole Top 50. The network was placed 25th in the table on UK fee income in 2014, which rose to £27.21 million, up from 34th place 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, MCIM 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 Licence 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.

The Masters in ROI have at December 2014

recruited franchisees covering 25 areas, who look after 5500 clients with a fee bank of

€5,084,000. All franchisees are in shop front premises. TaxAssist Accountants Ireland is

managed by a team of two 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.

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.

Canada

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 have visited Norwich.

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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. To view the Canadian Franchisee recruitment site please visit www.taxassistfranchise.ca.

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 franchisees the market is small business, defined as those with a turnover of less than

£2 million. 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).

Franchising in New Zealand

Franchising in New Zealand only really became established during the 1990's. Although

there were several major overseas franchises and some locally developed ones operating

here before that time, franchising was not widely embraced by many.

However, franchising flourished around the Millennium and NZ now has a good mix of

overseas and local, mature and new franchise opportunities being offered. In general terms

the public (and legal and financial advisors) are now far better informed about franchising

than they were in the past and are therefore able to make better decisions when selecting

opportunities.

NUMBER & TYPE:

According to ‘Statistics New Zealand’, the New Zealand population is just over 4.5 million

and is served by around 450 franchise systems, giving it the highest proportion of franchises

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per capita in the world. 70% of franchise systems in New Zealand are locally-bred and New

Zealanders have willingly accepted appropriate franchise systems from around the world.

Many of the major international franchises already have a presence in New Zealand.

McDonald's was established in New Zealand in 1976 and Pizza Hut in 1974 amongst other

food chains and they have grown dramatically over recent years.

New Zealand franchises differ vastly in numbers from the 1000 franchisees of Green Acres

home services franchise to the one or two of the new start-up systems. The last reliable

survey, Franchising New Zealand 2012, shows there are 446 franchise brands and 22,400

franchisee businesses operating in New Zealand. The annual turnover of the franchise

sector is estimated to be between $19.4 and $21 billion and employs 101,800 people.

Highlights from the Franchising New Zealand 2012 survey include:

The average franchisor has 13 years franchising experience.

24% of respondents commenced franchising in the last 5 years.

Despite the recession, the total number of franchised units increased by 5.3% from

2009 to 2010.

The number of franchised units has almost doubled since 2003.

Half of all franchised units are owned together with a spouse or partner.

26% of franchisees are over 50, only 4% under 30.

Franchisees remain within a franchise system for a median of 6 years before exiting.

87% of franchised units did not change ownership during 2009.

41% of systems have part-time franchisees.

The franchise sector employs over 80,000 people, mostly full-time staff.

LEGISLATION:

Government emphasis has focused on creating a 'level playing field' to allow competition

between companies on an equal footing. In keeping with this policy there is currently no

specific franchise legislation, although normal commercial law governs franchise

relationships. Of particular importance to incoming systems are the:

Fair Trading Act Health & Safety in Employment Act Consumer Guarantees Act The

Employment Act.

A review of franchising regulation took place in 2009; however no formal action was taken to

introduce new legislation. The self-regulatory Code of Practice introduced in 1996 by the

Franchise Association of New Zealand contains many provisions similar to those of the

Australian Franchising Code of Practice legislation.

MARKET FACTORS AFFECTING FRANCHISING:

The New Zealand economy performed extremely well following the market reforms of the

1980's, and the credit ratings of the country are high. The country has followed a pro-trade

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economic path in recent years with the abolition of tariff barriers. This policy has been

followed both by right wing (National Party) and left wing (Labour Party) led coalition

governments. There is a free trade agreement with China and Closer Economic Partnerships

with Thailand (2005), Singapore (2001) and Australia (1983). There are also Trans-Pacific

Strategic Economic Partnerships with Brunei and Chile.

However, as a small country with an export-led economy, the strength of the NZ dollar is

always at the mercy of outside forces. The Official Cash Rate (OCR) set by the Reserve

Bank is currently at 3 percent. Following the worldwide trend NZ is slowly climbing out of the

recession. New Zealand has the 12th lowest unemployment rate of the 34 OECD countries

and is below the average OECD rate of 8.6%. Staff are still being stood down in places but

many are leaving with good redundancy cheques and a desire to run their own business - a

positive factor for franchises.

The New Zealand Market

According to the Ministry of Economic Development 2009 report “SMEs in New Zealand:

Structure and Dynamics”:

97.2% (463,278) of enterprises employ 19 or fewer people

90% (427,399) of enterprises employ 5 or fewer people

69% (327,836) of enterprises have no paid employees

The number of SMEs (19 or fewer employees) increased 1.3% in the year to

February 2009

Firms with 5 or fewer employees accounted for 12% (229,500) of all employees

Self-employed people comprise 10.4% of the labour force

Firms with 5 or fewer employees had the highest average real profits per employee

UK Trade & Investment also report that the 350,000 SME’s account for more than 99% of

all businesses.

As in the UK, the target market for TaxAssist Accountants in New Zealand is enormous with

no recognised national brand specifically servicing this small business sector.

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

with a reduced territory size for certain city center locations TAD are offering their Master

Franchise Rights for New Zealand which will result in circa 45 single unit territories for the

Master Franchisee to award, support and administer. The anticipated pricing structure is

broken into two elements; a fee for territory Licence and a separate fee for the support

provided to the Master Franchisee by TAD. The support element of the fee will vary

dependent on the level of support required and the costs involved to TAD.

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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%

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

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

TAD has initially identified the following countries as prospective markets:

Australia

New Zealand

USA

Canada

A single unit sub-franchise territory has a population of circa 75,000. For a standard Master

Franchise Territory with a population of 4 million there is the potential for circa 40 sub

franchisees.

The proposed minimum Franchise Fee for a Single Unit is the equivalent of £34,950 plus

local taxes as applicable. With a population of 4,500,000, New Zealand will be a single

Master Franchise and circa 45 single unit Franchises within New Zealand with potential

revenue of £1,570,000 from Franchise fees.

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The role of the Master Franchisee

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

MASTER FRANCHISE PACKAGE

TAD 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 Sub-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

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TAD has a support centre of dedicated professionals all focused on supporting the UK

network of single / multi unit Franchisees. As the international side of TAD’s business

grows the Directors are committed to, where necessary, recruiting specialists in international

franchising to ensure that the UK business does not suffer.

TAD is focused on not just awarding Master Franchise Rights but working with the Master

Franchisee to secure long term success.

Whilst not providing technical support directly, TAD 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

TO FURTHER SUPPORT THE MASTER TAD WILL:

Appoint a dedicated support person who is highly experienced in franchising to be responsible for International Development

Provide 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 4.5 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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Key points of the TaxAssist Accountants Master Franchise:

PROGRESS FEE

£25,000 (non-refundable) payable with letter of intent

MASTER FRANCHISE AGREEMENT

10 year term and renewable for a further 10 year term rolling as identified in the then current Master Franchise Agreement

MASTER FRANCHISE LICENCE FEE

£75,000 - £125,000 payable on commencement less the Progress Fee already paid

MASTER FRANCHISE TERRITORY FEE

£75,000 payable on commencement

MANAGEMENT SERVICE FEE

25% of the management service fee received from your Sub-Franchise Owners and payable monthly to TaxAssist Direct Ltd

NATIONAL MARKETING COMMITMENT

100% of the Brand Awareness and Client Acquisition Fee (contributed by Sub-Franchise Owners) to be spent on national promotion

FUTURE LICENCE FEE PAYMENTS

10% of Single Unit franchisee fees payable as collected to TaxAssist Direct Ltd

In addition, all items required from TAD to establish each Sub-Franchise will be chargeable at the Sub-Franchise cost, as identified in the UK Sub-Franchise Information Memorandum, less the Master Franchise discount.

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FRANCHISE LICENCE

Exclusive Territory

Rights to use the TaxAssist Accountants Trade Mark

Rights to use the TaxAssist Accountants Know-How, Operating Methods and

Systems

Rights to develop a Sub-Franchise Network

TERRITORY FEE

Based on 45 Sub-Franchise Owners in the Master Franchise Territory

BUSINESS MANUALS: Online

Master Franchise Owner’s Manual

Master Franchise Owner’s Key Staff Training Manual

Sub-Franchise Owner Manuals (for your conversion to local requirements)

TRAINING & OPENING SUPPORT

Phase One – Operating own Sub-Franchise Territory

Phase Two – Operating the Master Franchise

IT SOLUTION

TaxAssist Accountants Website Inclusion & Email Address

TaxAssist Accountants Intranet Support Access

Business Form Templates

TaxAssist Accountants System – Managing the Sub-Franchise Network

MASTER FRANCHISE BUSINESS STATIONERY

Letterheads, Continuation Paper, Compliment Slips, Business Cards, Envelopes

MARKETING PACKAGE

Sub-Franchise Owner Recruitment Materials & Templates

National Brand Advertising / PR Materials

HQ SIGNAGE

Internal branding signage as considered appropriate by TaxAssist Direct Ltd

PACKAGE FOR OPENING OWN SUB-FRANCHISE TERRITORY

All as detailed in the UK Franchise Prospectus

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A Guide to the Estimated Start-up Costs

Guide to estimated Master Franchisee start up costs and ongoing fees:

Expenditure Low Range High Range Payable

Franchise Fee

Territory Fee £75,000 £75,000 Upon execution of the

Licence Fee £75,000 £125,000 Master Franchise Agreement

Deposit

Deposit to secure territory 10% of total Franchise Fee

10% of total Franchise Fee

As agreed

Management Service Fees

Single Unit Franchise Fees

10% 10% Upon execution of each Single Unit Franchise Agreement

On own MSF received 25% 25% Monthly

Other fees detailed in the Agreement

25% 25% Monthly

Commercial Premises Costs

Commercial office lease £500 £1,000 Upon execution

Shop front lease £1,000 £1,500 Upon execution

Shop front re-fit inc fixtures & fittings

£15,000 £25,000 As incurred

Equipment & Software

Laser printer £250 £250 As incurred

Computer Equipment £1,000 £5,000 As incurred

Communications Equipment

£1,000 £5,000 As incurred

Office furniture £1,000 £5,000 As incurred

Budgets

Franchise recruitment budget

£20,000 £35,000 As incurred

General advertising budget

£10,000 £10,000 As incurred

Working capital Varies on an individual basis

Other Costs

Legal fees £2,000 £5,000 As incurred

Trade Association Fees £2,000 £5,000 As incurred

PLEASE NOTE THE ABOVE ARE ESTIMATES AND WILL VARY DEPENDING ON LOCATION AND INDIVIDUAL CIRCUMSTANCES. ALL COSTS ARE SUBJECT TO LOCAL APPLICABLE TAXES & ARE BASED ON UK COSTS

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Notes to the Estimated Start-up Costs

MASTER FRANCHISE PACKAGE

The Territory Fee is based on the population of the Master Territory and the number of

projected Sub-Franchise territories

The Licence Fee includes all initial training, support and items supplied by TaxAssist Direct

Ltd and will vary, depending on the final costing.

DEPOSIT

Deposit 10% of the combined Licence & Territory Fee payable along with intent to proceed

letter. Deposits are non-refundable.

MANAGEMENT SERVICE FEES

Single Unit Franchise Fees 10% of Single Unit Franchise Fees are payable to TaxAssist

Direct Ltd.

On MSF received 25% of MSF received by the Master Franchisee from their sub-franchisees

is payable to TaxAssist Direct Ltd.

Other fees 25% of any other fees, as agreed, collected by the Master Franchisee from sub-

franchisees are payable to TaxAssist Direct Ltd.

COMMERCIAL PREMISES COSTS

Serviced Office Lease acquisition has not been included as the cost will vary depending on

personal choice, location, any existing tenant assignment premium and the landlord’s

requirements such as a security deposit or advance payment of rent. A lawyer, if required,

will charge for advising on and executing the lease and the Master Franchise may have to

pay the other party’s legal costs.

Shop Front re-fit including Fixtures & Fittings includes as a minimum signage, decorating,

window graphics and lighting but may also include provision for structural work and re-wiring

to meet the required standards

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EQUIPMENT & SOFTWARE COSTS

Laser Printer including scan facility of a basic office standard.

Computer Equipment includes a PC(s) or laptop, colour printer, Microsoft Windows XP and

Office, and provision for remote or small business server.

Communications Equipment includes a Broadband connection, dedicated business line and

phone system. A fax machine should be considered.

Office Furniture as a minimum desks, chairs, filing cabinets and general

stationery/consumables. Some of these items may be included with a serviced office.

BUDGETS

Franchise Recruitment is the minimum budget requirement for promoting the sub-franchise

opportunity and recruiting franchisees.

General Advertising is the initial budget required for promoting the TaxAssist Accountants

opportunity to prospective clients

Working Capital is to cover the business operating costs until it becomes established. This

will need to be fully identified in a business plan, and could be a combination of own cash

and business loan / overdraft facility.

(In addition, the Master Franchisee will need to be able to support your personal living

expenses until such time as the business can begin to provide you with an income.)

OTHER INITIAL COSTS

Legal & Accounting Fees provides for the initial legal advice on signing the TaxAssist

Accountants Master Franchise Agreement, and accounting advice in preparing a business

plan for starting the business.

Trade Association Fees is for membership to accountancy and / or franchise association.

VAT (or other local tax) has been excluded from the costs as it can be reclaimed with the first

VAT return. The Master Franchise Agreement requires that the business should be VAT

registered from the outset.

The above figures are estimates only and must not be taken as a guarantee of the final

cost. Before purchasing a TaxAssist Accountants Master Franchise, you must carefully

review all costs with your accountant and business advisers in order to prepare a

detailed business plan for your chosen operating location which should take into account

any relevant local factors and your particular requirements for the operation of the

business.

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Theoretical Master Franchise 5 Year Network Illustration

Franchisee recruitment

Year 1

Year 2

Year 3

Year 4

Year 5

New

Franchisees

6

6

6

6

6

Accumulative franchisees

6

12

18

24

30

Single unit franchise

fees*

£209,700

£209,700

£209,700

£209,700

£209,700

Accumulative

franchise fees*

£209,700

£419,400

£629,100

£838,800

£1,048,500

Low sales activity

Franchisee Turnover

Year 1

Year 2

Year 3

Year 4

Year 5

Active franchisees in their 1st year**

£40,000

£120,000

£120,000

£120,000

£120,000

£120,000

Active franchisees in their 2nd year

£80,000

£480,000

£480,000

£480,000

£480,000

Active franchisees in their 3rd year

£120,000

£720,000

£720,000

£720,000

Active franchisees in their 4th year

£160,000

£960,000

£960,000

Active franchisees in their 5th year

£200,000

£1,200,000

Network total

£120,000 £600,000 £1,320,000 £2,280,000 £3,480,000

MSF based on average

6%

£7,200 £36,000 £79,200 £136,800 £208,800

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Mid sales activity

Franchisee Turnover

Year 1 Year 2 Year 3 Year 4 Year 5

Active franchisees in their 1st year**

£55,000

£165,000

£165,000

£165,000

£165,000

£165,000

Active franchisees in their 2nd year

£110,000

£660,000

£660,000

£660,000

£660,000

Active franchisees in their 3rd year

£165,000

£990,000

£990,000

£990,000

Active franchisees in their 4th year

£220,000

£1,320,000

£1,320,000

Active franchisees in their 5th year

£275,000

£1,650,000

Network total

£165,000 £825,000 £1,815,000 £3,135,000 £4,785,000

MSF based on average 6%

£9,900 £49,500 £108,900 £188,100 £287,100

High sales

activity

Franchisee Turnover

Year 1 Year 2 Year 3 Year 4 Year 5

Active

franchisees in their 1st

year**

£70,000

£210,000

£210,000

£210,000

£210,000

£210,000

Active

franchisees in their 2nd

year

£140,000

£840,000

£840,000

£840,000

£840,000

Active

franchisees in their 3rd

year

£210,000

£1,260,000

£1,260,000

£1,260,000

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Active

franchisees in their 4th

year

£280,000

£1,680,000

£1,680,000

Active franchisees in their 5th

year

£350,000

£2,100,000

Network total

£210,000 £1,050,000 £2,310,000 £3,990,000 £6,090,000

MSF based on average

6%

£12,600 £63,000 £138,600 £239,400 £365,400

BACA based on £1,800 per franchisee

£5,400

£16,200

£27,000

£37,800

£48,600

*Based on a franchise fee of £34,950.

**Based on 3 active franchisees in the first 12 months Turnover is per franchisee

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Theoretical Profit & Loss Illustration: Master Franchise

Data (mid range sales activity) Year 1 Year 2 Year 3 Year 4 Year 5

New franchisee in the year 6 6 6 6 6

Existing franchisees in the year 0 6 12 18 24

Total franchisees 6 12 18 24 30

Network turnover £165,000 £825,000 £1,815,000 £3,135,000 £4,785,000

Income

Franchise fee@ £34,950/franchisee £206,700 £206,700 £206,700 £206,700 £206,700

MSF @ average 6% on turnover £9,900 £49,500 £108,900 £188,100 £287,100

BACA @ £1,800 per franchisee £5,400 £16,200 £27,000 £37,800 £48,600

Total £222,000 £272,400 £342,600 £432,600 £542,400

Direct Costs

Territory dev fee @ 10% of franchise fee £20,670 £20,670 £20,670 £20,670 £20,670

Franchise package @50% of franchise fee £103,350 £103,350 £103,350 £103,350 £103,350

Legal @ £500 per franchisee £3,000 £3,000 £3,000 £3,000 £3,000

Recruitment @ £4,000 per franchisee £24,000 £24,000 £24,000 £24,000 £24,000

BACA Levy £5,400 £16,200 £27,000 £37,800 £48,600

Total £135,750 £146,550 £157,350 £168,150 £178,950

Expenditure

MSF to franchisor £2,475 £12,375 £27,225 £47,025 £71,775

Telephone @ £150 per franchisee £900 £1,800 £2,700 £3,600 £4,500

Postage & stationery @ £100 per franchisee

£600 £1,200 £1,800 £3,400 £3,000

Meetings & newsletters @ £150 per franchisee

£900 £1,800 £2,700 £3,600 £4,500

Business Insurance £3,000 £3,500 £4,000 £4,500 £5,000

IT & software support £500 £500 £500 £500 £500

Sundries £900 £1,800 £2,700 £3,600 £4,500

Accountancy & Audit fees £1,000 £2,000 £3,000 £4,000 £5,000

Salaries: Director £40,000 £40,000 £40,000

Salaries: Franchise / Training Manager £30,000 £30,000 £30,000

Salaries: Admin support £10,000 £10,000 £10,000

Motor expenses: Director £5,000 £5,000 £5,000 £5,000 £5,000

Motor expenses: Franchise Manager £5,000 £5,000 £5,000 £5,000 £5,000

Travel & Accommodation £4,000 £4,500 £5,000 £5,500 £6,000

Total £24,275 £39,475 £139,625 £165,725 £194,775

NET PROFIT pre tax, bank charges and loan repayments

£61,975 £86,375 £45,625 £98,725 £168,675

Please Note

The above figures are exclusive of VAT (or other local tax), and are based on UK costs.

23

Notes to the Theoretical P & L Illustrations

DATA

New Franchise Owners provides for a realistic intake, subject to market conditions, the

Master Franchisees own aspirations, and the level of support that can be maintained.

Existing Franchise Owners in year indicates those that have been with you for more than one

year.

Total Franchise Owners in year shows how many Franchise Owners in your network year on

year.

Franchise Owner Network Turnover in year is taken from the Medium Sales Activity.

INCOME

Sub-Franchise Package Sales provides for all the items you supply in the Sub-Franchise

Package, less the Licence Fees.

Management Service Fees provides for the fees received from your Franchise Owners gross

territory income. For this illustration, we have simply assumed an average of 6%. (The MSF

is banded - Franchise Owners pay 9% on the first £140K of their sales, 6% on the next

£140K, 3% on the next £140k and 1% of all remaining gross sales in the same year.

BACA Fund provides for the levies received from your Franchise Owners gross territory

income.

DIRECT COSTS

Territory Development Fee provides for the portion of the Licence Fee element paid by your

new Franchise Owners which is payable to TaxAssist Direct Ltd.

Franchise Package Costs is the cost to you of providing the packages.

Franchise Lawyer Fees provides for the cost of completing each Franchise legal agreement.

Franchise Owner Recruitment provides for the third party costs of finding Franchisees

including advertising, franchise exhibitions etc.

BACA Fund is spending 100% of the levies received on National/Regional promotion for the

benefit of all your Franchise Owners.

24

EXPENDITURE

Management Service Fee is charged as 25% of the management service fee received from

your Franchise Owners and payable monthly to TaxAssist Direct Ltd.

Telephone Communications will vary depending on the level of usage, but we have used a

budget of £150 per Franchise Owner.

Printing, Postage & Stationery will vary depending on the level of activity and general usage,

but we have used a budget of £100 per Franchise Owner.

Franchise Owner Group Meetings & Newsletters will vary depending on frequency and final

requirements. We have used a budget of £150 per Franchise Owner.

Business Insurance provides for a general combined risks business policy which will vary depending on your location, turnover, wage bill and specific requirements.

Sundries provides for items of small cost that do not allocate to the above headings.

Accountancy & Audit Fees will vary depending on the accountant used, the amount of quality bookkeeping you do yourself, and your personal requirements.

Salaries & Bonuses – Director/General Manager. We have not provided for these costs as it will be for you to decide on these positions and the levels of remuneration.

Salaries & Bonuses – Franchise/Training Manager provides for one individual who is multi-skilled.

Salaries & Bonuses – Administrators/Finance Staff is a provision for this function.

Motor Expenses – Director/General Manager is a provision for business expense only.

Motor Expenses – Franchise/Training Managers is a provision for business expense only.

Travel & Accommodation has not been provided for as this will greatly vary on how far away your Franchise Owners are situated, and any meetings with the Franchisor.

NET PROFIT is before:

Master Franchise Owner's drawings and taxation

the cost of the Master Franchise Package which has been excluded from these illustrations in order to demonstrate the effect of pure trading

Bank and Finance Interest which will be dependent on the availability of Master Franchise Owner's own capital and any borrowing requirements

Depreciation which will vary depending on capital investment and the cost of depreciable assets.

Serviced Office Accommodation which will vary subject to your choice of location and size of office or shop front. It may need to include any landlord recharge of the building insurance.

25

PLEASE NOTE VAT (or other local tax) has been excluded from these illustrations as it is a requirement of

the Master Franchise Agreement that the business should be VAT registered from the

outset. We have used our experience in the UK to form the basis of the illustrations.

You must not take it that the results demonstrated are your guarantee of achieving similar

results in your chosen Master territory. Your success will greatly depend on your own hard

work and commitment, competition, market conditions and specific operating costs.

As your Franchise Network develops and Franchise Owners’ sales increase, and if

overheads are controlled, your business should make good progress as it becomes fully

established.

You will need to work with an accountant and/or business advisers to produce your own

individual business plan in order to reflect the specific operating conditions in your Master

territory, along with the level of sales activity anticipated. However, we will be happy to give

you every assistance.

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Master Franchisee Set up Schedule

DEPARTMENT ACTION POINT

ADMIN Prepare and dispatch Master Licence Franchise Agreement

together with invoice.

Organise Master Licence Franchisee training course to be held in

Norwich.

Prepare Franchise Agreement sub Franchisees of Master.

Advise all TAD banks, strategic partners and any other appropriate

organisation that we are moving into the region, requesting their

local contact details and requesting them to contact their associates

to provide us with an introduction to Master.

Liaise with Master to advise on communications structure to their

network i.e. Regional Meetings, Innovation Group and Annual

Conference.

Liaise with Master to assist in preparing their MIN form, collection of

monies through direct debit, collection of other Management

information required from their network.

Ensure all trademark, trade names, logos, brand identity marks etc

are all properly registered and approved for use in the local market

including the TAA logo with applicable symbol instead of £ symbol.

Liaise with Master to set up sub Franchise monitoring database and

actions to be taken on data.

Liaise with Master to create sub Franchisee contact database

including Agreement renewal dates.

Organise initial supply of letterheads, comp slips, business cards

for use by Master

RECRUITMENT Obtain map of the region showing defined territories and

populations - dispatch to Master for their info

Work with Recruitment Team for guidance on recruiting franchisees

Write to any PF's on database to promote sub franchise opportunity

& arrange local Discovery Days

Prepare content of Discovery Day in liaison with Master

Prepare country specific version of prospectus with Master

Prepare recruitment website with help from Master

Liaise with Master on Franchise media advertising i.e. magazines,

websites etc

Work with Recruitment Team to create media plan & budget for

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Franchisee Recruitment

Arrange for recruitment DVD to be amended in respect of offering

Provide copies of all recruitment letters and pro-formas to Master

TRAINING Liaise with Master to create 'Getting Started Manual' and all start up

procedures

Liaise with master to create a Training Academy in own territory

Liaise with Master to ensure their own staff will be capable to

deliver franchisee training courses

Liaise with Master to create the Franchisee initial training course

structure dates and also for the appropriate follow up courses i.e.

business valuation & Ltd Co

TECHNICAL Liaise with Master to iron out technical support for franchisees

Liaise with Master and other appropriate organisations to replicate

UK system

Liaise with Master on systems in place for Continuous Professional

Development

Liaise with Master for suggested IT structure and support

Liaise with Master to identify suitable IT supplier & support partner

Liaise with Master to set up helpdesk ticketing system

Liaise with Master to introduce Price Bailey equivalent & ensure

they understand how relationship in UK works

Liaise with Master to create technical support sites

Identify CCH equivalent and work with Master for all appropriate

authorised software packages to be used by the network i.e.

Cashflow Manager, SAGE, Payroll

Business expansion by buying blocks of fees. (Whilst Master should

be experienced in this market we should nevertheless ensure they

understand our methodology)

Liaise with Master in respect of IT support to their network

BUSINESS DEVELOPMENT

Create client website for the local market

Liaise with Master regarding shop front manual and identifying shop

fitters

Buying all appropriate domain names for client recruitment support

and any other reason this time to be purchased in our name i.e.

TaxAssist Direct Ltd

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Amendment of business tools i.e. fee estimator model, business

plans, etc for their local network

Liaise with Master in respect of all Practice Management tools

Liaise with Master in respect of internet bidding

Liaise with Master to identify lead generation companies to work

with

Share with Master in-bound lead system and all appropriate admin

forms, procedures etc

Share with Master all standard letters, client advert templates and

all other marketing tools

Create appropriate marketing website

Liaise with Master regarding Social Networking Sites strategy

Liaise with Master in respect of bank contact strategy

Liaise with Master for contact strategy for Association of self

employed

Liaise with Master in respect of Additional Services strategy

Liaise with Master in respect of referral schemes from banks

Share with Master our experiences in respect of public relations

Liaise with Master to find networking groups

Liaise with Master in respect of Branded Cars

Liaise with print provider regarding local currency payments for

stationery/literature order

Introduce Master to our Corporate Merchandise suppliers

Liaise with Master in respect of Franchise Development Manager

visits and meeting format

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The following is part of the UK Single Unit franchise prospectus and has been

used to illustrate what TAD delivers to their franchisees in the UK.

Where possible TAD will expect the Master Franchisee, with their assistance, to

source suitable suppliers for the services detailed that the Master Franchisee

doesn't provide directly and will work with the Master Franchisee to create their

own Single Unit Master Franchise Prospectus for the relevant Australian Markets.

Please note that not all services may be available in Australia.

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The Franchise Package

The TaxAssist Accountants Franchise Package includes:

LICENCE FEE

The licence fee grants the right to trade under the corporate identity of TaxAssist

Accountants for the duration of the Franchise Contract.

MARKETING

To kick start your business we provide you with an initial marketing campaign and 25 free

leads from our lead generation activities (Don't worry these won't all be delivered in your

first month!) and we also pay up to the value of £500 for your first year subscription to a

networking group of your choice.

The TaxAssist website attracts thousands of unique visitors every month, over 410,000

visitors in the 12 months ending 31 January 2014 alone. Whilst we are proud of our website

exposure it would be vanity to use this measurement solely to determine the strength of our

website presence and its effectiveness in generating business for our franchisees.

Our key metric in determining the success of our marketing activity is to measure how many

qualified leads the website generates and in turn how many of these qualified leads turn into

business for our network. We speak to every potential client and qualify whether there is an

opportunity of business before passing that lead to a franchisee, thus sifting out at the

beginning those enquiries that will never progress.

Without a qualification process, our franchisees would be inundated with lead enquiries

wasting time that we believe would be better spent on producing fee charging work. Other

franchisors claim high levels of sales leads from their marketing activity but only convert 1 in

20 of these leads into business. We don’t want franchisees having to follow up 100 leads to

convert only 5 into fee paying business. Our unique lead generation minimises the

franchisee involvement and our franchisees currently report a high 1 in 2.3 conversion rate

and delivers significant business each and every year to our network.

For every qualified lead provided to a franchisee there is a charge of £50 (though the first 25

leads are free as part of the franchise package). These leads are delivered year in year out

through our unique offline and online marketing strategy. The lead charge is recycled into the

brand awareness budget to provide further marketing benefits for the whole franchise

network. The purchasing of leads is fairly common in the accountancy industry but generally

attracts a much higher charge per lead and do not come close to converting at the same

levels as our system making it a cost effective way for franchisees to gain new business.

Our unique online and offline marketing strategy has been carefully crafted over many years

and has won several industry awards. Its effectiveness is shown by the network recording

that 2 of the top 3 sources of new business come directly from this blended mix of activity.

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IT EQUIPMENT AND MAINTENANCE PACKAGE

We specify high spec laptops which are suitable to run all applications.

TRAINING FEES

A six week intensive induction training course (including one week’s home study) covers all

aspects of the TaxAssist Accountants business model and prepares new franchisees for

trading as a TaxAssist accountant. This training covers a wide range of accountancy, tax,

software, sales and marketing topics. It is designed and delivered by our in house team of

qualified accountants and trainers in conjunction with specialist training partners. Through

this partnership we are able to ensure that materials are up to date, directly relevant for our

network and of the highest quality.

We pay for all meals and accommodation during the course and ensure you have the

opportunity to meet all staff in the Support Centre. During the initial six month period further

shorter training modules are delivered covering limited company issues, corporation tax,

payroll, guidance on completing your own accounts, planning tools, human resources and

staff recruitment and further software training. We have also introduced the TaxAssist

Training Academy which allows us to provide new training modules covering a wide range of

technical and general management skill topics.

The TaxAssist Accountants Training Academy provides bespoke training courses to

Franchisees and staff in Norwich and at regional centres around the UK. The Training

Academy fee of £50 pcm per territory covers ongoing training resources, additional courses

are charged at nominal rates.

BUSINESS ACCELERATION AND NURTURE PROGRAMME This is a holistic induction and monitoring package that is designed to help you set up parts

of your operation prior to the training course. The programme also monitors your business

development through the first six months and comprises further training at months two, three

and six.

The follow up training is a mix of technical, general management and business plan review to

track the progress of your business/

32

EMPLOYMENTOR’ – HR AND EMPLOYMENT PACKAGE

We are pleased to offer all franchisees subscription to ‘Employmentor’. This service

provides you with comprehensive HR support for all your employment needs and much

more.

SUBSIDY FOR SUPPORT AND HELPLINE

The franchise fee gives you access to all services provided by the Support Centre from day

one.

OPERATIONS MANUALS

The detailed Manuals form the basis of your training reference material and are explained

fully during the training programme. All the manuals are available online, on our support

website, once the course has been completed.

SUPPORT SITE

A wealth of useful information is contained in our easy to use intranet. The Support Site

forms the Blueprint for managing and developing a successful TaxAssist Accountants

practice. It offers advice and guidance, allows you to order stationery, and adverts, and book

into training sessions to name but a few features.

ADDITIONAL INITIAL SUPPORT

In addition to dedicated internet support, the franchise fee covers the first year’s payroll

software, 12 months use of the online learning facility, 3 month’s usage of CCH, first years

Federation of Taxation Advisers student Membership if required and launch assistance.

FREE SET UP ON DIRECT DEBIT SYSTEM

It is a key part of the TaxAssist business model that your clients should pay you by regular

monthly payments. This makes a very significant difference to your cash flow and also

enhances client loyalty.

33

TELEPHONE ANSWERING SERVICE

In the first year of your franchise you may be working on your own, or have few staff

members. In order to ensure a professional and corporate response to clients and

prospective clients, we are pleased to offer the services of a personal answering service for

either a full year's service or 120 messages whichever comes first. Each TaxAssist

Franchisee will be given the names of two or three PAs who will work for them and answer

their calls and forward their messages either by Email, SMS or Fax.

BUSINESS STATIONERY

A starter pack of stationery is provided, including letterheads, envelopes and business cards,

fully personalised with your details.

PROMOTIONAL MATERIAL

A comprehensive initial starter pack will be provided, including personalised corporate

brochures, marketing leaflets etc.

COMPETITOR ANALYSIS REPORT

Some thorough research into your competitors, their products and more importantly, how

they look after their customers, will provide you with valuable information that will help your

business become successful. A Competitor Analysis Report will highlight your competitors’

strengths and weaknesses. It will also tell you how to use the information to win more

customers and keep the ones you’ve got.

WEBSITE & EMAIL ADDRESS

All new franchisees are set up with email and their own website for you to personalise with information about you and your local contact details. We administer and maintain this for you.

ANTI MONEY LAUNDERING COMPLIANCE

We are pleased to provide as part of the franchise fee your first year’s membership fee to

AMLCC Ltd, who provide online Client Verification and The Complete anti-Money Laundering

Guide for Professionals. The Guide steers you through the process of client due diligence

including electronic verification and automatically classifies the client’s risk level.

34

SUPPORT

The benefits of franchising are that you are a self-employed individual benefiting from an

established support infrastructure and a committed brand development strategy. The extent

of the support you will receive from TaxAssist Accountants is comprehensive and comprises

of training, marketing and technical help desk for accounting, tax, software and Human

Resources. In addition to this, you will benefit from field visits from our Franchisee

Development Managers, Directors and our Technical and Training Teams, as well as

ongoing training to accommodate Continuing Professional Development requirements from

the accounting institutes.

We have been established since 1995 and recruited our first franchisee in 1996. Since that

time the network has grown to over 195 and our franchisees have gained substantial

experience that you can benefit from. You will find that the network will have experienced

nearly every aspect of setting up and trading as a TaxAssist Accountant.

The concept of network development and best practice is very important to us and we have a

number of arenas where the focus is on the franchisor/franchisee relationship. These

include ‘Innovation Groups’, Regional Meetings and an Annual Conference. These activities

allow franchisees to express themselves and make operational recommendations, and the

franchisor has opportunities to cement relationships with the network.

Unlike some of our competitors, we have no other business interests or our own

accountancy practice to support – meaning we can concentrate 100% of our time on you our

franchisee and your growth. Compare our competitors’ offerings closely to our own, both on

an initial basis and ongoing, because we feel we have a fully comprehensive offering.

35

Finances

A GUIDE TO ESTIMATED START-UP COSTS, AND ONGOING FEES:

Franchise Fee

Standard 5 year Agreement £34,950

Management Service Fees

First £140,000 turnover 9%

Next £140,000 turnover 6%

Over £280,000 3%

Above £420,000 1%

Brand Awareness & Client Acquisition fund:- £1,800 pa

(calculated and payable on a monthly basis increasing by £60 per year)

Our Management Service Fee is set so that as your turnover increases the

rate payable to us decreases

Commercial Premises Costs

Commercial office lease (per calendar month) £250- £650

Shop front lease (per calendar month) £1,000 pcm

Shop front re-fit (depending on premises) £20,000

(Prices would vary between regions)

Equipment

Black & white laser printer £200

Office furniture & photocopier/scanner £2,000

Mobile phone (per calendar month) £40

Fax £120

Telephone System (per calendar month) £1,760 + £60

36

Software

CCH Central (first three months free) £131 pcm

Moneysoft Payroll (first year’s subscription) Inc. in package

Microsoft Office 365 (first year’s subscription inc. in package) £118 pa

Training

The TaxAssist Accountants Training Academy provides

bespoke training courses to Franchisees and staff in Norwich

and at regional centres around the UK

£50 pcm per territory

Other start–up costs

Legal fees (optional) £400 - £600

Professional Indemnity Insurance £200 approx

First 12 months general marketing (networking, advertising etc)

Initial working capital (to be considered) will vary on an individual

basis.

£5,000

Leads

Inbound qualified leads £50 per lead

Employment & HR package

Employmentor (value £495 per year) Inc. in package

(Please note that all fees are subject to VAT at the applicable rate)

37

Property & Working Capital

The Franchise Agreement states that you will operate from shop-style premises

within 36 months of joining TaxAssist Accountants. You may wish to start trading

from such premises from day 1, and we have strategic relationships with certain

suppliers that can facilitate this.

SHOP REFURBISHMENT

We have a Preferred Supplier for shop fitting and they have been fully briefed on our

minimum requirements in terms of fittings and office equipment. The cost of a refurbishment

or shop fitting is dependent on the size and condition of the premises. The cost of

refurbishment at our flagship office in Norwich was £26,500 including IT hardware. Other

shop-style offices across the country have been refurbished at nominal costs, so it is prudent

to research this thoroughly.

PROPERTY SOURCING

Our support team have been specifically tasked to look after all aspects of sourcing and

operating from office and shop-style premises. With many years’ experience, the support

team are highly experienced in the TaxAssist Accountants franchise concept. We are in a

position to offer advice and guidance on sourcing rented offices or shop fronts.

WORKING CAPITAL

If you are joining us without an established client base, you will not have an initial regular

income. This calls for the provision of Working Capital and we have bespoke finance

packages provided by HSBC, Lloyds TSB and NatWest. The level of capital you will need is

dependent on several factors – regional variations in property and staff costs, personal

expense requirements and trading status (office or shop front).

38

Operating from a rented office can prove less capital-intensive and it also gives you an

opportunity to develop your business before moving to a shop front operation. The quality

and location of commercial offices are very important. Under these operating conditions

Working Capital requirements will still be governed by local market trends, and you will still

need to budget for rent, marketing and living costs until your revenue stream is established.

Funding for your franchise can be arranged by means of a loan and overdraft combination,

thus allowing for flexibility in terms of monthly expenditure.

RAISING FINANCE: THE BANKS

TaxAssist Accountants has built some excellent relationships with the major banks in the UK.

This means that we are nationally recognised by the banks that will support potential

franchisees with their initial franchise fee subject to their normal lending criteria.

Below are the contact details for the franchise sections of the banks we have made good

relations with:

Mark Scott

Franchise Development Director, RBS and

NatWest Franchise Section

Tel: 0800 0929117

[email protected]

David Williams QFP

Director, Franchise Business Development

RBS Corporate Banking

Tel: 07770 733376

[email protected] Donna King QFP Senior Franchise Development Manager Tel: 07825 351653 [email protected]

Richard Holden

National Franchise Manager, Lloyds TSB

Bank plc

Tel: 0800 6816078

[email protected]

Lorna Smith

Senior Franchise Manager, HSBC Bank plc

Tel: 0121 4553438

[email protected]

39

In certain situations some franchisees may benefit from the ‘Enterprise Finance Guarantee’

scheme – formerly the ‘Small Firms Loan Guarantee’ scheme run by the Department for

Business Innovation & Skills (BIS) - formerly the DTI and BERR.

The EFG is a loan guarantee scheme to facilitate lending to viable businesses where there may be a lack of security available. Guarantees are taken from the individuals for 100% of the facility provided and whilst the government provides a guarantee to the lender for 75% of the loan, the borrower is liable for the full amount. There is no requirement for supporting security behind the guarantee.

The EFG is a more expensive route as there is a 2% annual premium on the outstanding

loan amount which the Government charges for providing the security but if all other aspects

of the application stacks up and the only issue is the lack of security then the EFG is an

attractive route which many franchisees have benefited from.

Revenue Projections

By adhering to the Business Model and taking a proactive approach to marketing in your

territory, you should be attracting clients at a considerable rate. Client acquisition will be

facilitated by your shop front presence, and your marketing and networking activity will

seriously help the build-up of your fee-bank. Further client development will also come from

referrals.

It is not helpful to talk about average levels of achievement because each franchisee

approaches the business with their own aims, objectives and approach, under the guidance

and support of the franchisor. It is more practical to consider what can be achieved in reality.

For the franchisees that have opened in the last 3 years, the top 20% at the end of their first

year have an average of 116 clients and £75,000 of fees. We do not pretend that these are

easily achieved – it required real effort and enthusiastic following of our business model – but

that level of success is being achieved and, of course, bettered.

Gary Jacks joined our network in April 2006 and went straight into a shop front in Ellesmere

Port in Cheshire. He states "I found that after my April launch I was soon securing clients -

I've already (at month 5) secured 59, and the annual fees from these currently stands at

£46,000. By following TaxAssist Accountants business model, the speed with which I've

grown my client base has far outweighed my expectation".

As at February 2014 Gary looks after 651 clients and has a fee bank of £369,000 across his

four shop fronts in Queensferry, Chester, Moreton and Ellesmere Port.

Please note the above figures are for illustration purposes only and are not a guarantee of

earnings. Revenue and business growth is dependent on activity. Our business model

involves certain activity requirements including marketing, networking and general business

development.

40

10 Reasons Why You Should Join TaxAssist Accountants

1. Our Brand Name:

We are the leading franchised accountancy organisation looking after small businesses,

with over 15 years’ experience of operating a substantial national network of branded

offices that is well recognised and respected.

2. Our Training:

We are confident that we are providing the best initial and ongoing training for you and

your staff. As well as providing a comprehensive initial six week training course which

includes food and accommodation, we also offer ongoing update days as well as

bespoke training if needed in Norwich and regionally, as well as CPD facilities.

The tax and accounts training is provided by our own staff and specialist training

partners, and we provide a nurture programme which lasts for six months after the initial

course focusing on business development, HR, staff recruitment and client acquisition.

We also provide courses on pricing and fee raising as well as social media training to

keep our network abreast of business relevant developments.

3. Support Centre:

All of the Support Centre staff are 100% committed to supporting the Franchise network

and have no other business interests to take their focus away from the importance of

assisting the network.

The three executive directors have a breadth of business experience which they bring to

the franchise. Karl Sandall had 26 years working for a major clearing bank, and is an ex

bank manager, Sarah Robertson is a Chartered Marketer who previously operated her

own Marketing and PR company and Phil Sullivan spent 26 years with HSBC achieving

Executive Management status before leaving to establish his own business in 2006

providing corporate and commercial advisory services.

4. Shop Front Concept:

We have a highly visible presence with over 160 shop fronts and growing around the

country. The shop front brand is supplemented by the many branded cars driving

around the country, national advertising, internet presence and marketing collateral. We

constantly look to be at the forefront in terms of brand awareness, technical training and

support for business growth. The shop front will allow you to build up a team of staff

who you can delegate to, allowing you the free time to work on the business not in it.

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5. An Exclusive Territory: You gain the rights to operate and receive leads in an exclusive territory of postcode

districts based on either one or adjacent postcode districts. Once established, there is

the possibility of taking on an area and a half or two franchise territories.

6. Lead Generation & Business Development Strategies:

You will receive a number of free leads, currently 25, as part of your initial franchise

package. These will be generated from a marketing campaign in your area and our

ongoing ‘inbound lead’ service. The Support Centre provides a social media presence,

PR, national advertising, telemarketing and an unparalleled internet presence. These

and other initiatives will generate inbound leads (business opportunities) for you.

7. Access to Specialist Advice/In-field Back-up:

We work closely with all franchisees on maximising their profit and working towards their

own exit strategies. We see this as an invaluable contribution to our franchisees’

business life. This type of consultancy work does not come cheap and we are pleased

to provide this as part of our service. We utilise a range of bespoke business tools for

our network in respect of their own business planning, fee charging and profitability

analysis. We also have an association with the 2020 Group who provide specialist

marketing and technical advice to accountants.

As well as qualified staff available to assist you in running and developing your

business, we also have a comprehensive support site available 24/7 offering

documents, information and advice.

8. Resale Value:

The business model makes financial sense, with the potential for taking a good salary

whilst creating a real asset for your long term future. Fee banks are very saleable (there

are more buyers than sellers) and with the TaxAssist Accountants brand name, this

could add a premium to the value of the business when you decide to sell.

9. Additional Service Providers:

So that your business can be the ‘one stop shop’ for small businesses, we have a range

of branded partners including: Asset Finance, Independent Financial Services, Debt

Recovery, Company Formations, Employment Advice and Will Writers, amongst other

services. Many of these suppliers pay a commission to you, which can form a

substantial part of your revenue. These services are not only available to you, but for

your clients to offer their clients too.

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Employmentor is available at a much reduced cost via TaxAssist Accountants, and

offers businesses a complete administrative tool for handling the recruitment and

management of their staff, whilst ensuring that they comply with all their legal

requirements. They offer an on-line service which allows access to all of the legal

resources you (and any employer clients you may have) will need. The website provides

subscribers with an array of templates, precedents, model letters and general

procedural guidance on each stage of the employment process, and is backed up by a

telephone and email helpline staffed by qualified lawyers who, unlike many call centre

type competitors, benefit from their day to day experiences as active employment

lawyers.

It is a key part of the TaxAssist business model that your clients should pay you by

regular monthly payments. This makes a very significant difference to your cash flow

and also enhances client loyalty. It is not normally possible for small businesses to

originate direct debits. The Banks restrict this facility to larger companies and often

impose stringent security and financial requirements. Our supplier of the Direct Debit

Scheme, CMS Limited (a wholly owned subsidiary of London and Zurich plc), acts as an

intermediary, amalgamating the requests from a range of smaller users so that it

becomes a large originator and meets the exacting requirements of the Banks to

originate direct debits. Using CMS software you can arrange for the collection of direct

debits from your clients on a regular basis in addition to occasional irregular payments.

CMS Limited collects the monies due into a holding account and the proceeds are

remitted to you on the day after collection.

When you join TaxAssist Accountants you are joining a network with a visible, credible

brand. We have a bank contact scheme whereby we keep banks updated with all

franchisees, sending out your business card and introduction letter. We also keep in

regular contact with the Associations of Self Employed who can provide access to their

many trade members and potential clients.

10. Helpdesks:

All of the Support Centre staff are on hand if you need to talk through any issues or

queries. One of the main support functions that is available to you as part of the

franchise package is the technical helpdesk. This is manned from Monday to Friday

8.30am – 5.30pm, by individuals with a range of accountancy and tax qualifications and

is available to you and your staff. There is also a marketing helpline if you wish to

discuss an idea, advert, proposal or campaign.

As technology progresses the reliance placed on your IT increases which is why we

have researched a panel of recommended national IT support partners across the UK

for you to choose from. Should you prefer to use a local IT company you are free to do

so. A laptop and CCH software is provided as part of your franchise fee and CCH

themselves will be responsible for the installation and updates of their software, at no

charge to you. All in all a complete practice management system.

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Achievements

TaxAssist Accountants has won various business awards over the last few years. Here are some of them:

2014: Winner of ‘Most Innovative Tax Team of the Year’

British Franchise Association – Franchisor of the Year Finalist

Awarded ‘5 Star Franchisee Satisfaction’ by Smith & Henderson

2013: Best Franchise Awards – Best Training & Support

Unbiased.co.uk’s Media Adviser Awards – Winner of the

Professional Adviser of the Year – Awarded to Jo Nockels,

Communications & Training Manager

British Franchise Association – Franchisee of the Year Finalists

AIA Winner of The Accountancy Firm of the Year Award.

Smith & Henderson – Nominated for Best Overall Franchise

3aaa – The Best UK Accountancy Firm Supporting Apprentices.

2012: The Best Franchise Awards – Winners of ‘Best Training &

Support’ and ‘Best Large Franchisor’

British Franchise Association (bfa) Franchisor of the Year Finalist

2011: TaxAssist Accountants pick up 2 awards; they were from the

EDP as a ‘Business Development’ Winner and also the Best

Franchise Award for ‘Best Training and Support’ 2010: GOLD WINNER British Franchise Association (bfa) Franchisor of

the Year

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Achievements 2014

Smith & Henderson Awarded the 5* Franchisee

Satisfaction 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

2012

Smith & Henderson Best Franchise Award ‘Best Large Franchisor’

2012

Smith & Henderson Best Franchise Award

‘Best Training & Support’

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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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PHASE TWO

The TaxAssist Accountants Concept

Every small business needs to have an annual set of accounts prepared in one form or

another, for taxation and other purposes. Very few business people have the knowledge or

inclination to prepare their own accounts hence the ever-increasing demand for accountancy

services. In addition there are people who need to complete their own Self-Assessment who

will usually need some help and will turn to a professional for assistance.

With initial and ongoing training and support, you can provide that help and build your own

business and financial independence.

People who need to complete their own Self-Assessment will usually need some help and

will turn to a professional for assistance. With initial and ongoing training and support, you

can provide that help and build your own business and financial independence.

The small business proprietor who is seeking to establish and grow his business will also

need a wide range of services from different places. For example, a visit to the Bank or a

Finance House to borrow some money, to a Factoring Provider for help with debts, to Web

Design and IT Consultants… the list goes on. We have brought access to all of these

services under one roof for our clients, by creating and continuing to develop a range of

Additional Services.

Our concept is accountancy – but how different are we from all the other accountancy

practices across the UK? We are the largest UK-wide network to provide a full accountancy

and tax service specifically for small businesses. We identified back in 1995 that small

businesses were often not being looked after very well and we consider that it is still the

same today. The proprietors of these businesses were not always proactively supported in

looking for ways to reduce their tax liabilities and in helping them develop their businesses.

By pushing ourselves forward we have become the leading accountancy network in the UK

aimed specifically at small business.

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How TaxAssist Accountants was founded

Whilst working in practice in 1995, John Westgarth FCA saw an opening in the market place,

when he figured out that small businesses would need help with their accounts in the wake

of self-assessment. He anticipated that the demand for such a service would be ideal for a

franchise network, and TaxAssist Accountants was formed. Following a period as a partner

in a national firm of Chartered Accountants, John went on to build up and sell on a number of

accountancy practices over a 20 year period. He made use of his experience and

knowledge of how to build up a successful accountancy practice specialising in looking after

small businesses, having himself built up a client base of 500 with a turnover of £300k, to

develop the TaxAssist Accountants business model and support infrastructure.

TaxAssist Accountants was founded in 1995 by a group of dedicated professionals and

based on a concept that was, and still is, fundamentally simple: to bring first class

professional services to the small business owner. Our aim is to continue to expand in a

controlled manner to become a UK wide (and also now International) network of people all

working hard to succeed in both financial and personal terms.

Through franchising we knew we could maximise growth potential to the mutual advantage

of both TaxAssist Accountants and our Franchisees. Franchising helps to minimise the risks

and pitfalls usually associated with business start-ups, by providing specific guidance for

franchisees newly into business.

Since recruiting our first franchisee in 1996 our philosophy has naturally evolved with a large

percentage of our network now operating from shop-style premises. Our strategy is to

continue to recruit new franchisees who share in our vision, and to facilitate the move of

remaining franchisees into similar shop-style premises.

Our intention, through the growth of our brand across the country, is to further establish

ourselves as the “natural choice” for small businesses.

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TaxAssist Accountants Timeline 2000 Karl Sandall joins TaxAssist Accountants as Chief Executive and Director.

2004 After extensive research, the integrated software suite offered by CCH is launched across the network.

Sarah Robertson joins the TaxAssist Accountants Board as Business

Development Director.

2005 With full network agreement, the name of the franchise is changed from TaxAssist Direct to TaxAssist Accountants. This decision was made so that the franchisees’ potential clients could more clearly understand the core services being provided.

2008 Phil Sullivan joins the Board of Directors as Network Operations and Finance Director.

2009 The Master Franchise Rights are awarded to an established firm of Accountants in the Republic of Ireland. As at February 2014 they have grown to 23 franchisees and a fee bank of almost €3 million.

2010 TaxAssist Accountants wins the BFA Franchisor of the Year Award.

TaxAssist Accountants enters the Accountancy Age survey for the first time

as the 34th largest accountancy firm with growth in sales of 19.9%, one of

just six top 60 firms that achieved double-digit growth.

Sarah Robertson wins 2020 Innovation Group ‘Marketing Person of the

Year’ for the second time (she previously won the award in 2007).

100th TaxAssist shop opens.

2011 Our commitment to training leads to the founding of the TaxAssist

Accountants Training Academy. This is made up of our in house team of

qualified accountants and specialist trainers, who design and deliver our

initial and ongoing face to face and online, and Continuing Professional

Development programmes. This partnership ensures that materials are up

to date, directly relevant to our network and of the highest quality.

2012 Debbie Corbett and Vince Dalaimo become the first franchisees in the

history of the network to exceed the £1,000,000 fee bank milestone

TaxAssist Accountants wins ‘Best Large Franchisor’ awarded by Smith &

Henderson.

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2013 TaxAssist Accountants voted winner of ‘The Accountancy Firm of The Year’

award by the members of the Association of International Accountants

(AIA) beating global groups and industry giants.

150th Shop front opens

For the third year running, Smith & Henderson awards TaxAssist

Accountants the award for ‘Best Training and Support’. We are also

awarded a ‘5 star franchisee satisfaction Recognition Award’

In the Accountancy Age Top 50 listings, TaxAssist Accountants beats the

“Big 4” international groups achieving the fifth highest growth across the

whole Top 50.

A TaxAssist Accountants resale breaks the million pound barrier when Mark

Fordham sells his franchise to Mike Melling.

TaxAssist Ireland breaks into the Top 20 Accountancy Firms in the

Republic.

2014 The Network has a record start to 2014 when for the first time, a Franchisee

exceeds £100,000 sales in one month.

The Master Franchise Rights are awarded to Rina Mancini for the Greater

Toronto area of Canada.

TaxAssist Accountants are up to 25th in the Annual Accountancy Age Top

50 survey

Franchisee Assisted Management Buyout. John Westgarth retires as

Chairman and Director after TaxAssist Accountants completes a MBO. This

sees the business 32% owned by franchisees, 53% by the senior

management team and 15% by long-standing external business partners.

This is believed to be the UK’s first ever franchisee-assisted management

buyout. Karl Sandall, Chief Executive of TaxAssist Accountants is joined in

the buyout team by TaxAssist Directors Sarah Robertson (Business

Development) and Phil Sullivan (Network Operations and Finance). They

will be supported on the Board by two Non-Executive Directors, John

Chambers, Corporate and Commercial Consultant with Ashton KCJ

Solicitors and a representative appointed to represent the franchisees

interests.

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TaxAssist Accountants Mission Statement

To deliver an unrivalled Accountancy & Tax service to small business operators across the

UK. By establishing and reinforcing the TaxAssist Accountants core values we aim to

become the leading business service of its kind, representing a visible and recognisable

brand; known for the cornerstones of value-for-money and service.

Through the national network TaxAssist Accountants is to become the first point of contact

for professional business services to the small business sector.

British Franchise Association

The British Franchise Association (BFA) is the only voluntary accreditation body for

franchising in the UK. Its remit is to develop and continuously improve the standards of good

practice in franchising and to accredit franchisors who meet these standards. The BFA now

represents some 346 UK franchise brands each vetted against a strict code of business

practice. We are a Full Member of the British Franchise Association (BFA) and we fully

endorse the BFA's code of ethics and operate in accordance with them.

August 1997 - Provisionally Listed Member

August 1999 - Upgrade to Associate Member

October 2003 - Upgrade to Full Member

Visit their website: www.thebfa.org

Karl Sandall (CEO) and David Paulson (Senior Manager, Franchise Recruitment) are both

accredited BFA Qualified Franchise Professionals.

The Qualified Franchise Professional (QFP) is the formal recognition of professional knowledge and experience in franchising. It demonstrates understanding of the complexities and best practice in franchising and the investing of time to continuously develop understanding. The QFP has been specially developed for people working within the franchising industry who want to demonstrate their experience, understanding and ethical approach to franchising. Professional advisors to the industry, franchisor owners, directors, managers and franchisee support staff will all benefit from the learning and recognition that the QFP provides. As a standards-based franchise qualification built upon the ethics of the bfa, this qualification is open only to principals or employees of bfa member organisations. This further strengthens the value of the qualification and underpins the vital importance of best practice and ethics within UK franchising.

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Franchising Statistics

We know that franchising is the most successful way of starting a new business. But don’t

just take our word for it – below are some highlights from the 2013 British Franchise

Association/NatWest Survey which remains the UK’s leading survey of the current state and

dynamics of franchising.

The franchise industry’s annual turnover is £13.4 billion.

Average franchisee turnover is £356,000.

Around 561,000 people employed in the UK franchise industry.

930 franchise systems operate in the UK.

Franchisors see better prospects for themselves than the rest of the economy. 88 per

cent expect improvements in their business over the next year, while only 31 per cent

expect the economy to pick up.

The average start-up costs for a new franchisee across all industries is £150,000 -

£170,000

Two thirds of franchisees trading less than two years are making a profit.

Sources: NatWest/British Franchise Association (BFA) Survey 2013

This is the 29th annual survey conducted on behalf of the British Franchise

Association (BFA) and sponsored by NatWest. The statistics shown relate to the UK

franchise industry as a whole and not to TaxAssist Accountants.

CONSUMER SURVEY

Research on public opinion of franchising reveals that the public would prefer to buy goods

and services from a franchised business over a non-franchised business.

The research, conducted by independent research house BDRC on behalf of the British

Franchise Association, polled a representative sample of 1235 UK residents aged between

18-55.

Respondents were asked about their preferences for purchasing goods or services from a

franchise versus a non-franchise with the results highlighting a distinct favouritism towards

franchised businesses. The majority – a massive 45 per cent – said that they would first try

out a franchise over a non-franchise, while only 23 per cent prefer to use a non-franchised

brand.

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Respondents identified a number of benefits that they feel that franchises have brought to

them, explaining this newly identified consumer trend. They are as follows:

69 per cent felt that they benefit from the local business which is backed by a national

brand/organization

66 per cent said they know exactly what they are getting in products and service

64 per cent said they felt the service is more likely provided at an agreed and consistent

standard

60 per cent said that prices are more competitive

54 per cent said they feel more valued as a customer

53 per cent said they receive better service because they deal with the owner

The Support Infrastructure

TaxAssist Accountants Training Academy Programme

There are four TaxAssist Accountants training courses spread throughout the year. These

last for six weeks and take place in Norwich, with a week’s home study in week four. All new

franchisees are required to take an online aptitude test at home before joining the training

course, and for those whom we feel it would be beneficial, we require them to attend a two

day introduction to bookkeeping course ahead of the six week training course. If the

franchisee passes the aptitude test they do not need to complete the pre-course training

although they can still attend these two introductory days if they wish.

The Training Academy provides our initial and ongoing accountancy and taxation training.

We are confident that they have the best to offer with regard to course material and course

tutors and we are delighted to be able to offer this training to franchisees of TaxAssist

Accountants.

The introduction to bookkeeping course (if attending) will take place on the Thursday and

Friday preceding the six week course. The next three weeks will cover all aspects of

accounts production and taxation for sole traders and partnerships and software training.

These three weeks of intensive training are then followed by one week of home study (which

will include reading, case studies and launch planning). This will be followed by a week

covering practice management, recruitment, payroll, IT set up, our support site and social

media training.

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The final week will be dedicated to sales and marketing training. We pay for all

accommodation and meals during the residential period of the training course. We also

ensure you meet and get to know the Support Centre staff so that, when you are out in the

field, you know who to turn to for help and our support to you will not be faceless.

Additionally, after you have been trading two months you will return to the Support Centre

for three days further CCH and Ltd Company training. At month three you will return for a

week, during which you will attend a development day to review your progress to date and

provide you with additional sales and marketing tools, study corporation tax and Ltd

Company software, and receive guidance on preparing your own accounts. There will be

three additional development days after you have been trading for six months at the support

centre, focusing on CCH software, payroll & P11D, planning tools and helping you to further

build your business.

By the end of the initial six week period of training you will know how to;

Market yourself, find and retain your clients

Competently complete year end and monthly/quarterly management accounts and tax

computations

Complete Self-Assessment tax returns and a wide range of other tax forms

Operate bookkeeping, VAT and payroll software and be able to advise your clients

Run an efficient shop or office and business with the support of IT, marketing and

eventually staff

In short – how to run and grow a successful business

On an ongoing basis, we also provide modestly priced courses at our support centre in

Norwich and regionally, to keep the network up to date with technical and marketing

developments. Our marketing courses include pricing and fee raising as well as social media

training to keep our network abreast of business relevant advancements.

Twice a year we provide Regional Training Days to cover Budget, tax and accountancy

updates. These are held at four locations around the country at no extra cost.

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Federation of Taxation Advisers (FTA) exam

Franchisees that do not already hold a recognised accountancy qualification will be

expected to sit the FTA exam, at regional centres around the UK, during sittings held twice a

year. Our training gives franchisees around 80% of the theoretical knowledge required to

become a fully qualified member of the FTA.

Our comprehensive training courses, together with exam technique practice you will be

advised on, should enable you to pass this exam first time. The cost of the first sitting is

included in the franchise fee.

You will then be entitled to use the letters ‘FTA’ after your name on your business stationery.

ATT Qualification

You will need to enrol on a distance learning course to gain the additional knowledge and

examination practice. However the ATT have now changed their rules to allow the taking of

one examination at a time.

ICAEW

In 2004, the Institute of Chartered Accountants in England & Wales granted us authorisation

to train Chartered Accountants.* This means we can offer the ACA qualification to

franchisees’ staff, provided part of their training takes place in Norwich at our centre, and the

entire training contract is managed and run through the Support Centre. This accreditation

is not given lightly and once again shows the strength of the TaxAssist Accountants training

programme and brand.

* You or a staff member would need to be ACA or ACCA qualified in order to benefit from

this.

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Continuing Professional Development

Qualified accountants and students in the UK are required to maintain continuing

professional development (CPD) throughout their working life. It is also strongly encouraged

for non-qualified accountants, and may well become mandatory in the future. We offer a

complete solution to this, using innovative online learning aids and face-to-face courses.

This solution enables existing and newly qualified accountants to meet the CPD

requirements set by their qualifying institutions, as well as ensuring our entire network meets

these same standards.

In 2005, TaxAssist Accountants Support Centre received ACCA

Platinum Approved Accredited Employer status for our ACCA

Professional scheme qualification training of staff.* This is the highest

level of accreditation ACCA awards to employers and means that our

training and development procedures for ACCA Professional scheme

trainees have been judged by ACCA to meet best practice in the

following areas:

Study Support; Work Experience Requirements; Appraisal & Workplace Development;

Training Records and; Continuing Development.

* If you are a non-qualified franchisee, you can sign off work, but it would need to be

countersigned by a fully qualified member of staff at the Support Centre. Time spent

working for you would not be eligible to go towards obtaining a practicing certificate.

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Manuals & Support Site

The support site forms the blueprint for managing and developing a successful TaxAssist

Accountants practice. The site provides franchisees with a vast resource of reference

material and guidance for all aspects of running a franchise, 24 hours a day.

The detailed manuals form the basis of your training reference material and are explained

fully during the training programme. All the manuals are available online, on our support

website, once the course has been completed.

CCH SOFTWARE

In 2004 we introduced a fully integrated software suite to our

network and in 2011 we upgraded to CCH Central. As well as

compliance applications such as accounts production and

personal and corporate tax, franchisees use CCH software for practice management and

customer relationship management.

An integrated database is much more than just a location to hold all client information. It’s an

opportunity to use that information to develop and build your business relationships. Every

time you send an email, speak to a client on the phone or meet face to face, you have a

chance to build relationships and promote your practice – ideal for the proactive adviser. It

can be used for planning and marketing exercises and has excellent management tools

such as the facility to review tax returns for potential HM Revenue and Customs enquiries.

With the tools available through CCH Software, you are perfectly positioned to:

Promote your practice through marketing activities

Respond to requests for information

Offer high-quality advice with ongoing fee-earning potential

Share client documents and information online

CCH Central is a suite of applications based on a new programming language (.NET) which

provides a more scalable and robust platform. Benefits include:

A single point of entry to access client data

A consistent look and feel across applications

A client-centric approach with the client record being the focus with key static data

centralised

Cross product reporting

If you wish to find out more about CCH please visit www.cch.co.uk

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Technical Helpdesk

One of the main support functions that is available to you as part of the franchise package,

is a technical help line. This is manned from Monday to Friday 8.30am – 5.30pm, by

individuals with a range of accountancy and tax qualifications, who can help you and your

staff with questions relating to work you have taken on from your small business clients.

(See Support Centre staff listings in module three for further information on the experience

and qualifications of those who operate the help line.)

During your first year of operation in particular, you will need to call on the help line for

reassurance and advice, and we are proud of the level of service and confidence we instil in

our franchisees. Mike Wood our franchisee based in Ayr comments “just wanted to say that

I phoned support this morning 8.30am, not expecting to catch someone in, almost

immediately the phone was answered and my query was comprehensively answered; great

service!”

Specialist Services

There will be times when your clients will need assistance with a query in a specialist area

such as foreign taxes, inheritance tax – or maybe a complex capital gains tax issue - which

would be more time consuming for you to deal with and outside of services covered by the

normal engagement letter. It may not be efficient for the help line to deal with these types of

queries and therefore for enquiries of a specialist nature we reserve the right to charge a fee

for this professional advice, using an internal or external specialist as appropriate, which you

will then pass on to your client. You will of course be entitled to charge your clients a

premium for this. After all, it is your knowledge and contacts that will have sourced this

advice.

Remember the philosophy of TaxAssist Accountants has and always will be to

provide a service to small businesses only – i.e. keep it simple.

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Lead Generation Service

OUTBOUND LEADS

During the early stages of the franchise, cold calling can be an invaluable source of client

acquisition to supplement your own local marketing efforts and our national marketing

activities. We have researched a number of Telemarketing Agencies, and we have a panel

which we recommend, offering slightly different approaches. For each of these we have

negotiated special rates for our network.

There can be no guarantees that any outbound appointments will be obtained as a result of

this marketing, but experience shows that good results can be obtained and at the very least

will create brand awareness in your area amongst the small and new businesses in your

area.

INBOUND LEADS

As well as leads obtained from cold calling, we also receive inbound leads as a result of our

national marketing. These leads are qualified at our Support Centre to ensure they are

genuine before being forwarded on.

A lead should always be viewed as an opportunity rather than a guaranteed sign up, as

ultimately it will be up to you to sell your services during the initial appointment. Obviously,

training is provided initially and the marketing team are also available at the end of the

telephone to help you at any time.

A charge is made for each lead and appointment provided (outbound or inbound, currently

£50.00 plus VAT). This represents an inexpensive method of obtaining new clients and can

help you create positive cash flow. Remember, you only pay for the lead once and your

clients will stay with you for many years. From our monitoring, we have calculated that the

average annual client fee for the basic accounts and tax return work is approximately £700

(plus VAT), so the service should pay for itself many times over. Also, remember that once

you have built up a substantial client base many of your new clients will come from referrals

and recommendations from existing ones.

Included with the franchise package are a number of free leads (a combination of inbound

and outbound leads) to help kick-start your marketing activities. The free outbound leads

will be gained as a result of an initial marketing campaign carried out by one of our

agencies. This campaign is comprised of three months of live calling, followed by three

months of follow up calls. This marketing launch will take the form of a mailing, advising that

there is a new TaxAssist Accountants operation in the area. This will be followed up by a

telephone call where, hopefully an appointment will be booked. A telephone call will also be

made after the appointment to gain feedback on how it went, which will then be fed back to

the franchisee.

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Office and Shop Front Premises

When you join TaxAssist Accountants, you will be making a commitment to operate your

franchise from shop front premises within 36 months of joining. Our Franchisee

Development Managers, senior Support Centre staff and Directors will be able to assist you

when considering location, and they can help you locate suitable premises within your

territory.

What do we mean by a ‘shop front’? When we created the first ‘shop front’ in Norwich our

main intentions were to create a modern, welcoming, branded office with the aim of

departing from the look and characteristics of traditional accountancy practices. From the

pictures below we think you will agree that we have fulfilled our objectives.

Interior shots of our Norwich shop front

We currently have over 160 ‘shop front’ offices open all around the UK.

Here are some of them:

Debbie Corbett & Vince Dalaimo Alex Smith – Plymouth

Holborn, London

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Peter Sewell – Prestatyn, Wales David & Anne Dixon – Epping, Essex

Alasdair Maclean – Dalkeith, Scotland Keith & Katherine Loader - Northampton

Indira Mandalia – Pinner, West London Andrew Twynam – Chesham, Herts

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Cheryl Hopkins – Nuneaton Andrew Logan - Bedford

Shop Front Testimonials

“The shops have far exceeded our expectations. We opened our first shop in 2005 to give

our clients easy access to our services and the shop was so well received that we were

delighted to be able to open 3 additional shops to help us cater for growing demand”.

David Dixon

Bishop’s Stortford, Ipswich and Epping

“I have recently been approached by a competitor to buy them out…The plan is to bring 72

clients on board…This would not have happened without the shop.”

Chris Robertson

Bexhill-On-Sea

“We picked up 3 specific clients from my launch party with a fee income of around £2000. It

was an excellent day with good press coverage which has significantly increased my

presence in the local area. I would recommend a launch party to anyone going into a shop

front as I found it excellent for business. It was a tiring day but well worth the effort.”

Phil Marriott

Loughborough

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Additional Features Include

Annual General Conference - Our Annual Conference is a large-scale event focusing on

the past year at TaxAssist Accountants and outlining plans for the future. Held at a top

quality Hotel, the conference is followed by a Champagne Reception and Dinner, with

entertainment included. For the first year of operation as a TaxAssist Accountant, two

complimentary tickets for attendance to the Annual Conference are provided.

Corporate Merchandise - We will provide you with an initial supply of a range of

corporate merchandise including TaxAssist Accountants pens, mugs, umbrellas and

mouse-mats. You will also be able to purchase further supplies, which can be

personalised with your contact details. Corporate marketing materials are also

available to you.

Individual Website - We supply you with your own individual TaxAssist Accountants

website address which enables you to market yourself in your territory electronically.

Full training is provided on the initial training course and ongoing advice is always at

hand. This requires no search engine promotion as we already promote the

http://www.taxassist.co.uk website.

This website is for promoting in local directories, newspaper adverts, business cards

and any other form of local promotion. You receive the same great content that

currently resides on http://www.taxassist.co.uk yet it is personalised to your business

and area.

E-mail address - As a franchisee you will be given a @taxassist.co.uk email address to

use for communicating with clients and with the support centre. E-mail is a vital way in

which we communicate with our franchisees so this becomes a vital asset to your

business. Again, full support and training is given.

First year’s subscription to a networking group - For your business to meet its full

potential, you will need to be active with your marketing and networking. We would

encourage you where possible to join a networking group such as the Business

Network International or Business Referral Exchange. These groups allow only one

representative from each industry sector, so if your local group has a vacancy, we will

fund your first year of membership. If you are unable to get into either of these groups

we will pay for your first year’s subscription to join a similar group up to a value of £500.

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Additional Services

We have negotiated arrangements with a host of high quality Additional Service providers, to

offer a range of services for you and your clients. Large national brands such as Lloyds

TSB, NatWest and The Co-Operative Bank are keen to work with us. Association with such

well-known brands can only help the growth of our network and increase brand awareness,

as well as ensuring that franchisees are able to offer a full range of business services to

their clients.

We have researched each of these providers by following our due diligence process, which

involves meeting with them face-to-face, taking a bank reference, and at least two business

references. In many cases these providers have been recommended to us by members of

our network, and we are always pleased to receive introductions in this way.

Some of these providers pay a commission, this is usual in the course of their business and

in every case this is passed on to the franchisee that makes the introduction. There is no

hidden agenda - the entire process is transparent. If you are able to profit from any

commission made this is seen as an advantage, although it is not key in the decision making

process and is not a part of the due diligence process.

Examples of Additional Services providers include Independent Financial Advisers, General

and Commercial Insurance, Asset and Invoice Financing, Will Writing, Telecoms Solutions,

Debt Recovery Services, Business Recovery and Insolvency, Employment advice and many

others.

Direct Debit Scheme

Historically TaxAssist Accountants have encouraged franchisees to sign up their clients on

standing order. This was seen as key to maintaining good cash flow. Using the power of

the TaxAssist Accountants brand, we have now been able to negotiate a direct debit

scheme which is an even better way of taking payments. This is available not only for you

the franchisee, but also for your clients to sell to their clients. This is a major selling point for

you, because small business would not normally have access to this scheme – but they can

through TaxAssist Accountants!

The main disadvantage of standing order arrangements is that when you wish to amend

monthly payments in any way, consent is needed by the client in written form. This then

leads to time having to be spent on processing and chasing forms. The advantage of direct

debit is that it does not require the client to sign and return anything if you wish to increase

your monthly payments, which you may wish to do as a result of a fee review.

The initial set up fee of £250 is included in the franchise fee.

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Running the Business

You may be thinking one of two things at this point – this franchise opportunity is incredibly

simple, or that there are hidden requirements that may hinder the chance of success. The

fact is that the business model is simple and the commercial blueprint is very well

established and very robust. For those aspects of the setup that may seem unfathomable at

the moment, our total support function is there for you.

Your list of “grey areas” may include queries over financing, premises, staffing and HR, best

practice, Franchisor influence, exit strategies and protecting your asset in the event of Death

in Service. You may have queries over operational techniques and being able to provide

service to your clients whilst you are building your business. As a mature Franchisor,

TaxAssist Accountants has solutions to cover these areas.

Staff & HR

Clearly you will not want to run a shop-style operation on your own so you will need to

consider taking on staff, outsourcers or sub contract workers. Further guidance on who to

look for, and where to find them, will be provided in the practice management section on the

support website and on the initial training course. You need to think about planning ahead,

and taking on staff to allow you the free time to build up your client base. You also need to

take on the right staff and you will need assurances that you have engaged them in

accordance with employment law. That’s why we have forged relationships with

organisations that are specialists in their fields, and we work with you to make this happen.

Servicing Clients Whilst Building the Business

You cannot be in two places at the same time – completing an existing client’s accounts and

attending fact-finding meetings with prospective clients. However, in the early days you may

not feel comfortable appointing a qualified accountant on a realistic salary. We have direct

links with a supplier of professional bookkeeping and accounting services that can cover the

service provision at a manageable cost, leaving you with operating profit and the time to

develop your business.

This provider can support you in the early days, and even constitute a part of your own

development strategy whereby you choose to use them for a proportion of all of your

accounting work. Their costs are worked out as a percentage of your fee to your client, so

the expense is highly visible and very affordable.

This option allows you to work towards the ultimate goal – for you as the franchise Principal

to work on the business rather than in it.

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Best Practice and Franchisor Influence

You will be your own boss, with the benefit of our support infrastructure. To keep you in the

loop with Best Practice you will have access to our support website and have the opportunity

to meet with staff members at the Support Centre, benefit from Franchisee Development

Manager visits, Technical visits, CCH Training Visits, Director visits and meet with your

fellow franchisees at an annual Regional Meeting, and other training and meeting events.

Twice yearly there are Franchisee Forums. Attendance is by invitation from the Support

Centre in order to ensure a full cross section of views from a mixture of franchisees covering

a range of experience, age and location. The purpose of the forums is for a group from the

network to meet with the Directors to discuss issues and debate future Support Centre

strategy in terms of support and direction. In terms of the franchisor’s influence, with

TaxAssist Accountants you will see that we entertain and support relevant suggestions

wherever possible. The developments in our training and software were instigated by

requests from the franchisees themselves.

Exit Strategies

It is prudent to consider an exit strategy before even starting a business venture or a

franchise. The technical detail regarding exiting the franchise is covered in the Franchise

Agreement, though you may feel encouraged to know that your franchise is your business.

So long as there has been no breach of the Franchise Agreement, you will have the

opportunity to sell your business at the end of the franchise term, although you do need to

give us 12 months to find a new TaxAssist Accountant to take over from you if you wish to

sell your franchise.

This is to protect the TaxAssist brand name in the area. We will do our best to find someone

to take over your business, but if after 12 months there is still no one lined up to take over

from you, then you are free to sell as you wish. From what the accountancy brokers tell us,

fee banks or accountancy businesses change hands at the rate of between £0.90 and £1.10

for every £1 of Gross Recurring Fee depending on the structure of the sale. It is also the

case now that yearly one off work, if good records are maintained and it can be proven that

one off work comes in every year, can be included in the multiple. We recommend that you

contact reputable business brokers for advice in this area.

As the TaxAssist Accountants brand grows we foresee a premium on this, as new investors

will see the added value and goodwill that comes with being part of TaxAssist Accountants.

You may see that you will be the owner of a considerable asset and you may wish to protect

this asset in the event of your death. We have a strategic partner in place, Steele & Co

Solicitors, who provide Death in Service cover, so your legacy will be administered in an

ethical and professional way.

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As an alternative to selling your business, you may decide to appoint a senior member of

staff as the Practice Manager so that you can wind down your involvement over time. In this

scenario you may decide to take a decent income from the business and only work on a

part-time basis, focusing on business development and staff development rather than

actually servicing the client base. You may then decide to sell your business to your senior

employee over a period of time. This may represent the most attractive rate for your exit.

On leaving the franchise there are deferred fees to consider. However, so confident are we

in our franchise concept and business model that we have introduced a reduced deferred

fee in the first year. This fee is £6,000 rather than the standard figure, as explained in the

franchise agreement and exists for those franchisees who feel they have made the wrong

decision in taking on a franchise.

This fee is subject to conditions.

End of UK Single Unit franchise prospectus

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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 will 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.