What Does a Franchise CPA Do, and How Do You Choose One?

A CPA, or Certified Public Accountant, is a licensed accounting professional. According to Investopedia, CPAs typically work in public accounting, corporate accounting or government service but can also hold executive positions like CFO.

While CPAs are often known for their role in tax preparation, they can also specialize in auditing, bookkeeping, managerial accounting and more. In the case of franchise CPAs, their scope of work expands beyond what many may consider being the standard responsibilities of an accountant.

“I think there is a common misconception that a CPA just sits there and looks at numbers all day,” said Erica Bortz, a CPA with Concannon Miller. “That’s very far from reality in our space. There’s compliance work and routine work that needs to be done, and our role is a whole lot more than just counting numbers.”

Of course, franchises can benefit from CPAs in ensuring that their numbers are counted correctly, but the professional relationship runs much deeper than that.

“Franchises need CPAs so that their compliance gets done timely and accurately,” explained Bortz. “Most franchisees that I’ve had experience with don’t have the depth, internally, to be able to handle some of the compliance issues associated with filing tax returns and preparing financial statements.”

Bortz said that a CPA’s place within a franchise network can be varied, working with both franchisees and franchisors, but that she happens to work with many franchisees.

“In my experience in working with franchisees, which I’ve been doing for 25-plus years, I tend to do a lot more consulting work for franchisees than I do for the rest of my account base,” she explained. “A lot of that is because many franchisors have restrictions on how franchisees own or transfer their franchise, whereas in a non-franchise business, there are no restrictions.”

Because franchising often requires a large initial investment and substantial ongoing financial involvement and can bring issues unique to franchising specifically, it can be useful to identify a franchise-specific CPA rather than a regular accountant. Broadly speaking, the work that a franchise CPA does will aid their client in managing debt, employees, cash flow and broader compliance requirements.

Beyond the CPA designation and required professional development, Bortz said that some additional traits benefit CPAs looking to work with franchises.

“I never know what my day is going to look like. I do a lot of consulting, so I can get a phone call today from somebody who wants to buy 10 restaurants or somebody who wants to sell three restaurants — it’s just varied,” she said. “From my perspective, it’s very important that my team and I are flexible, that we’re knowledgeable and that we are really able to multitask and interact with our clients appropriately. The numbers are important, but the relationships, I think, are paramount.”

Like many business relationships, a good fit is crucial. Bortz said that she finds that many national franchisors prefer their franchisees to work with someone who has extensive experience and a deep network of other knowledgeable people within their organization. 

“I know that the franchisors are concerned about the financial viability of their franchisees, so working with a firm who understands the numbers of the entity and the expectations of the franchisor is very important.”

Hayden Field writes for Franchise 500, “You need a firm that can support your specific operation and structure. It must understand the franchise model and have experience with multi-state, multi-region, or even global growth models… For franchisees, don’t underestimate your business’s complexity, and consider your own unique needs.”

Additionally, Field notes that both franchise experience and specific sector experience can be helpful. Generally speaking, just because a CPA or firm has experience with franchises, they are not necessarily guaranteed to be well versed in restaurant franchises, for example.

Because franchise CPAs have such a unique role within the franchise ecosystem, ensuring a great fit in all areas — industry of expertise, length of service, professional network and interpersonal skills — is well worth the time and effort.