How it runs for franchise owners
Reports come from closed, reconciled books in QuickBooks Online Advanced or Xero, formatted to the brand's chart of accounts so the annual franchisor submission and the bank package are the same numbers.
What is outsourced financial reporting?
Outsourced financial reporting means a remote accounting team prepares your periodic financial statements and management reports instead of an in-house controller. The team works from your own accounting file, applies a consistent close and review process, and issues a report pack on a fixed date each month. You keep the data, the software and the decisions.
What we handle for franchise owners
- Unit P&L with prime cost, occupancy and royalty as a percent of sales
- Consolidated statements across units and across entities where needed
- Franchisor annual financial statement in the brand's required layout
- Lender package with covenant figures calculated and sourced
- Plain-English monthly note on variances by unit
The KPI that matters here
Report pack delivered within 2 business days of the close, every month.
Franchises compliance notes
Franchisor royalty reporting
Your agreement defines gross sales for royalty purposes, and the definition often excludes sales tax and refunds but includes gift-card redemptions and delivery orders. We keep the ledger's sales accounts aligned to that definition so the weekly upload and the monthly royalty statement reconcile without manual adjustments. Any dispute is documented with POS exports the franchisor can trace.
Marketing-fund and local advertising reporting
Brand marketing-fund contributions are a separate percentage from royalties and many agreements also require a minimum local advertising spend, often 1 to 2% of gross sales, with proof on request. We track both in their own accounts and keep invoices attached so the annual attestation is a report, not a search.
Audit rights and record retention
Franchise agreements commonly allow the franchisor to inspect books and POS data, and to charge the audit cost to you if under-reporting exceeds a stated threshold, frequently 2 to 3%. Every sales entry carries its source document in LedgerDesk so an inspection can be answered from the file.
Multi-state sales tax and payroll
Units in different states carry different sales-tax rates, filing frequencies and payroll registrations. We track liabilities by unit and state, prepare the workings, and your registered preparer files; we do not file on your behalf.
Franchises software we work in
More for franchise owners
Other services for franchises
Financial reporting in other industries
Frequently asked questions
Can you produce the annual financial statement my franchisor requests?
Yes, when the books already follow the brand's chart of accounts, the annual statement is an export with a short review. We prepare it in the required layout, tie it to the royalty reports submitted during the year and send it to you for approval. If the franchisor requires a CPA review or compilation, your CPA does that from our package.
What is prime cost and why do you report it per unit?
Prime cost is cost of goods sold plus total labor, the two costs a unit manager can control week to week. Reporting it per unit as a percentage of sales shows which locations can carry their royalty, rent and debt service and which cannot. Franchisors and lenders in food and service brands read this number first.
How do you compare units of different sizes and ages?
By expressing every line as a percentage of that unit's sales and by tracking same-store sales against the prior year for units open more than 12 months. New units are shown separately with pre-opening costs excluded from operating results. The KPI dashboards service for franchise owners turns these comparisons into a weekly view.
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