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Success Story - Franchise Royalty Accounting

Improving franchise royalty calculations and reporting

Superior consulting services delivering successful accounting and finance outcomes

A healthcare franchiser had experienced significant growth and was concerned that its royalty revenue processes were not performing efficiently for the new scale. Aventine Hill Partners was brought in to improve the accuracy and timeliness of the processes and reporting; and to fill a key vacancy on an interim basis.

Our Solution

Our accounting and finance consultant began by analyzing the franchise contracts and developing a template for how the the royalties should be calculated.

  • The processes that franchisees used to self-report were analyzed to identify gaps and improvement opportunities.
  • The amounts being reported were compared to the royalty calculation template to identify variances and inconsistencies.

It was determined that royalty payments were being under-reported, directly impacting the franchisers top-line revenue.

A new royalty revenue process was defined that would be simpler for the franchisees to operate and more accurate. A training video was made to educate all offices on the process and the calculations. The set-up process for new offices was improved to assure that calculations would be correct for new franchisees.

During this period, the company experienced a vacancy in a key accounting role. Through our Project and Interim Solutions service, one of our consultants filled in as Interim Internal Reporting Manager. During this tenure, our consultant cleaned up the past two years of financial history and prepared documentation of the accounting procedures to assure that newly hired personnel would be able to easily assume responsibility.

Results

Through the assistance of Aventine Hill Partners, this healthcare organization was able to improve its top-line revenue and the overall efficiency and accuracy of its back office accounting.

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