1. abacus Franchising Company Limited
Frequently Asked Questions and Answers

2. abacus Franchising Company Limited
Contents
Who can purchase a franchise and what attributes are abacus looking for? 5
As a qualified accountant do I require a practicing certificate? 5
As an accountant in practice I must also have a professional services agreement. Does
abacus have anything in place for this? 6
How selective is abacus on choosing franchisees? 6
What is the USP of abacus? 7
Is abacus a member of the British Franchise Association? 7
Can I have a copy of your franchise agreement? 7
Do you advise me to take independent professional advice before purchasing a
franchise? 7
Can I speak to some of your existing franchisees? 8
Is there anybody else we can contact? 8
What is the Franchise Fee and how do you justify the fee? 8
What does the franchisee receive for the purchase price? 8
Why do you form each franchise as a limited company? 9
Can I choose my company name? 9
As I am sole director do I require a company secretary? 10
Can my spouse be a director and/or a shareholder? 10
Where will my registered office be? 10
When will my year-end be? 10
On what basis were the territories created and who did this? 10
What do you mean by exclusive territory? 11
Is it possible that an existing franchisee may have clients in my chosen territory? 11
The franchise licence is for 5 years. What happens at the end of 5 years? 11
How much is the licence fee? 11
What if I don’t want to renew the franchise after 5 years but wish to carry on trading?
12
What if I want to sell the practice after 5 years? What restrictions are there? 12
What happens if, due to ill health, I am unable to look after the practice? 12
What happens if I die during the 5 years? 12
What if I decide that I have made a mistake and wish to terminate the agreement? 13
Has anybody terminated an agreement and why? 13
Why do I need a Consumer Credit Licence? 13
Why do I need to register with the data protection registrar? 13
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3. In my second year do I have to use the same insurance provider for my Professional
Indemnity Insurance? 13
In my second year do I have to use the same insurance provider for my Employers
Liability Insurance? 14
Why do you use Nat West bank and is it compulsory for franchisees to use Nat West?
14
Why do you register the franchisee’s Company for VAT immediately? Doesn’t this
position us at a disadvantage with our clients and competitors? 14
Exactly how much point of sale and promotional literature do we receive? 15
Can we order additional stationery and brochures or do we have to find our own
printers? 15
What type of binding machine do you supply and how many binding coils do we get?
15
Is the 0844 telephone number one where clients would have to pay extra to call me
and why do I need it? 15
I already have an email address can I use this for the business? 16
What is the abacus intranet? 16
Are the help lines in VAT and Tax free to use? 16
What manuals does abacus provide? 17
If I leave the franchise do I have to return the manuals? 18
What is on the CD? 18
What is the content of the Induction course and how long is the course? 18
Do I have to sign up for the Franchise before coming on an Induction Course? 19
Where are the induction courses held and will I need to organise a hotel? 19
How often are Induction Courses held? 19
How many candidates do you have on a course? 19
If I am interested in coming on an induction course how do I reserve a territory? 19
Will I be expected to pay for the franchise at the end of the induction course? 20
Do I wait until I have been on the induction course to organise funds to pay for the
franchise? 20
Do you provide assistance in obtaining a loan? 20
How much working capital do I require? 22
Do I wait until I am ready to start a franchise before coming on an induction course?
22
How can I find out which territories are available? 22
Who installs the software? 23
What support do we get from CCH? 23
As I grow my practice can I increase my user licences on the CCH and Sage products?
23
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4. Do I get any training material from CCH? 23
Is there a list of ancillary service providers? 23
Can I use my own associate partners? 24
Do I get commission if any of my clients use the alliance partners? 24
Who do I contact at Head Office to organise one of the alliance partners to meet my
client? 24
What IT equipment do I require? 24
Does abacus have anyone who could advise me to ensure my PC meets your
specification? 25
Do you have any minimum performance targets? 25
What happens if I don’t meet the performance targets? 25
Do I need to open an office as soon as I commence trading as an abacus Franchisee?
26
What are the management/royalty fees and when do they have to be paid? 26
Are there any other costs other than management fees? 28
How do I find my clients? 28
Do you confirm and verify the appointments generated by the Call Centre? 28
Do you contact the potential client after the franchisee has been on the appointment?
29
Can I continue to use the Call Centre after receiving my initial 100 appointments? 29
How are the Call Centre bands broken down? 29
What fees do I charge clients? 29
Do franchisees have to prepare monthly returns to Head Office and why? 29
What ongoing help will I get and from whom? 30
Is the business seasonal? 30
What hours will I be expected to work? 30
Do I have to pay for my own local advertising? 30
What happens if I already have clients? 31
Why are there 3 parties to the franchise agreement? Who is the guarantor? 31
Now I have looked at the presentation on the CD read these questions and answers,
what do I do next? 31
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5. abacus Franchising Company Limited
Frequently Asked Questions
Who can purchase a franchise and what attributes are abacus looking for?
Only qualified accountants can purchase a franchise. Our philosophy is to provide our
clients with a value for money service and we believe this can only be achieved by
recruiting experienced accountants.
The bodies recognised by abacus are: -
Institute of Chartered Accountants in England and Wales
Institute of Chartered Accountants in Scotland
Institute of Chartered Accountants in Ireland
Chartered Institute of Management Accountants
The Chartered Association of Certified Accountants
The Chartered Institute of Public Finance and Accountancy
The Institute of Financial Accountants
Communication skills are essential to enable the franchisee to develop strong
working relationships with their clients. We are also looking for accountants with
general business acumen and the ability to “look outside the box”. Most importantly
a candidate must be self-motivated and determined to build a successful practice.
As a qualified accountant do I require a practicing certificate?
This varies dependent upon which accountancy body you are a member of.
ICAEW
Yes you must have a practising certificate. The 2010 fee is £259 and the
application process takes about 21 days. For more information you can
contact the ICAEW on 01908 248028 or email postqual@icaew.co.uk
The ICAEW web site address is www.icaew.co.uk and an application form can
be downloaded from www.icaew.com/index.cfm?route=118395
ICAS
Yes you require a practicing certificate. Unfortunately the information is not
available on their website. You have to contact the membership department
on telephone number 0131 347 0100.
ICAI
Yes you require a practicing certificate. Unfortunately the information is not
available on their website. You have to contact June Harrison on telephone
number 02890 231541.
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6. CIMA
You must initially register as a member in practice. You can contact CIMA on
020 8849 225 or email cima.contact@cimaglobal.com . Guidelines for
members wishing to register as a member in Practice can be found at the link
below. The cost in 2010 to register as a member in practice is £65.
http://www2.cimaglobal.com/cps/rde/xchg/SID-0A82C289-C089A14E/live/root.xsl/12977.htm
After a year in practice you will then be able to apply for a practicing
certificate. The CIMA website address is www.cimaglobal.com and the
guidelines for application can be found at the link below.
http://www2.cimaglobal.com/cps/rde/xchg/SID-0A82C289-A2D301EA/live/root.xsl/12954.htm
The Members in Practice application form for 2010 can be found at the link
below
http://www2.cimaglobal.com/cps/rde/xbcr/SID-0A82C289-A2D301EA/live/MIP_Practicing_2008_FINAL(1).pdf
ACCA
Yes you require a practicing certificate. The 2010 cost is £300.00. It is a full
practicing certificate that you will require.
The web site address for the forms and information on your application is
www.accaglobal.com/members/professionalstandards/prac_info/forms
CIPFA
No practicing certificate is required.
IFA
Yes you require a practicing certificate but unfortunately the application form
is not available on their website. You must contact the membership
department on 01732 458080 and they will post an application form to you.
As an accountant in practice I must also have a professional services
agreement. Does abacus have anything in place for this?
Yes our solicitors have drafted a comprehensive agreement. You will find this in the
practice manual and also on the CD of useful letters and checklists, which you
receive when, you purchase a franchise.
The agreement is between you and another qualified accountant who will look after
your clients if you fall ill etc. As we have a number of accountants at Head Office we
can sign the agreement with you so that we will look after your clients if you are ill
or incapacitated.
How selective is abacus on choosing franchisees?
It is vital to the future success of abacus and all its franchisees that we are extremely
selective as to who can purchase a franchise.
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7. What is the USP of abacus?
There are a number of USP’s to the abacus franchise but two of the key ones are as
follows: -
1. For any accountant starting their own practice the biggest issue is “where am
I going to get my clients from”?
One of the biggest advantages we have over other franchise opportunities is
we do not generate leads for our franchisees we provide them with 100
confirmed and verified appointments in their first year of trading from bands A
– D.
Because all our appointments are confirmed and verified we have an average
conversion rate of 40% across all our existing franchisees.
2. We at abacus believe that our clients require far more from their accountant
than a set of accounts and a tax return. We expect all our franchisees to be
proactive and look at ways in which they can help the client develop their
business.
Our USP is therefore our national network of alliance partners that can provide
your clients (no matter how big or small) with all the administrative support
they require. These services cover Pensions, Mortgages, Insurance, Health
and Safety, HR, IT Services, Expense Reduction Analysts, Quality Assurance,
Telecoms and much more.
Is abacus a member of the British Franchise Association?
We were accepted as an Associate Member of the BFA on 8 th November 2006. We
are currently in discussion with the BFA in regards to Affiliate Membership. Affiliates
to the BFA are specialist advisors approved by the BFA to help both Franchisors and
Franchisees. As a national network of qualified accountants and members of the BFA
we feel we are ideally placed to fulfil this role.
Our contact at the BFA is Catherine Jackson (01491 578050)
Can I have a copy of your franchise agreement?
Yes, a copy will be given to you when you attend one of our “Get to Know Us
Seminars” held at our head office.
Do you advise me to take independent professional advice before
purchasing a franchise?
Yes. We believe it is in the best interest of both parties that you fully understand and
are comfortable with the agreement before signing it.
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8. If you or your advisors have any issues with the agreement we are more than happy
to discuss them with you. You can also contact the BFA solicitors for advice. Their
contact number is 01491 578050.
Can I speak to some of your existing franchisees?
Yes, after attending a “Get to Know Us” seminar we will organise 2 or 3 of our
existing franchisees to contact you. We will try and organise it so that you speak to
franchisees at different levels of development and wherever possible a franchisee
local to your region.
Is there anybody else we can contact?
Yes you can contact the BFA’s accreditation manager, Catherine Jackson, on 01491
578050.
What is the Franchise Fee and how do you justify the fee?
The franchisee fee is currently £26,000 payable before commencement of the
franchise.
To obtain membership to the BFA we have to provide them with a breakdown of the
complete fee. We make no profit from the initial fee our profit is generated from the
management fees and commissions generated from the use of the alliance partners.
What does the franchisee receive for the purchase price?
We provide the franchisee with the following: -
1 Off the shelf limited company with the franchisee as director and sole
shareholder.
2 An exclusive territory.
3 5-year franchise licence allowing you to trade as abacus.
4 Consumer Credit Licence.
5 Data Protection Registration.
6 Professional Indemnity Insurance.
7 Employers Liability Insurance.
8 Nat West Business Bank Account.
9 VAT Registration.
10 Practice stationery including Letterheads, Business Cards, Continuation
Sheets, 4 Types of Branded Envelopes and Branded Accounts Front and
Back Covers.
11 Binding machine and metal spines.
12 Installation of a business telephone line and allocation of one of our 0844
numbers. (However, it is the franchisees responsibility to provide the
telephone and pay the line rental and call charges).
13 50 sets of company brochures.
14 Email address i.e. jim.smith@abacusnetwork.co.uk
15 Your own abacus web site.
16 CRM system attached to your website.
17 Access to the abacus Group Blog and Face book page.
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9. 18 Your own abacus Twitter account.
19 Online quotation system.
20 Access to the abacus intranet.
21 Technical help lines in VAT and Taxation.
22 Manuals in Accounting, Taxation, HR Procedures, Marketing and Practice
Management.
23 CD with standard letters, forms, checklists, tax tables and adverts.
24 One week in house induction course at the Head Office.
25 Sage line 50 – 50 Companies.
26 CCH Practice Management software – 150 clients (see pdf file attached)
incorporating: -
CCH ProSystem Console
CCH ProSystem Client Database
CCH ProSystem Time and Fees
CCH ProSystem Document Management
CCH ProSystem CRM
CCH ProSystem Diaries and Resource Planning
27 CCH Accounts Production – 150 clients (see pdf file attached)
28 CCH Personal and Partnership Tax– 150 Clients (see pdf file attached)
29 CCH Corporation Tax – 150 Clients (see pdf file attached)
30 Subscription to KashFlow online bookkeeping program for more
information click on the link below
http://www.partners.kashflow.co.uk/
31 abacus In-house Incorporation software
32 Head office support.
33 Access to all our other specialist admin alliance partners.
34 Data for 10,000 businesses from Yell Experian for your territory.
35 Most importantly, 100 confirmed and verified appointments in your first
year of trading in bands A to D.
Why do you form each franchise as a limited company?
Despite recent changes by the government a limited company is still the most tax
efficient vehicle for the franchisees to trade through.
On the induction course we discuss in detail the tax benefits of a limited company
compared to sole traderships and partnerships.
Can I choose my company name?
No. The intention is for all our franchisees to trade as abacus as we are trying to
develop a national brand that will be instantly recognisable in the accountancy
market place. This can only be achieved if all our franchisees trade as abacus.
All our territories are numbered so your limited company will be called, for example,
abacus 123 Limited but your trading name will simply be abacus.
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10. As I am sole director do I require a company secretary?
No recent, changes in the Companies Act 2006 allow sole director companies to
function without an appointed Company Secretary.
However, if you wish to appoint a Company Secretary then initially for ease of setting
up the business one of the abacus Head Office finance team will be the Company
Secretary. Once everything is in place if you wish to change the company secretary
to be your spouse, other relative or friend it is entirely up to you.
If you wish we are more than happy to remain as your company secretary.
Can my spouse be a director and/or a shareholder?
Yes, once the company is formed you can add whomever you wish as a director and
shareholder.
All we ask is two things. One that you inform us of the changes you are making and
two, you make them aware that they must abide by the franchise agreement.
Where will my registered office be?
When we incorporate the company we use the Head Office as the registered office of
the company. However, as with the company secretary, once everything is set up
you can transfer the registered office of the business to your home or office address.
Most of our franchisees have started their business from home and have left the
registered office of the business as the Head Office address rather than use their
home address. They move the registered office address when they move into their
own office.
When will my year-end be?
When incorporating the limited company we set the year-end to the 31st March,
which ties in with the Inland Revenue tax year-end for limited companies. This
means that your first period end maybe shorter than one year.
I must stress the year end date has no barring on the life of the franchise. The
franchise is for five years irrespective of the year end date.
On what basis were the territories created and who did this?
From the inception of our franchise we have carried out everything with the view of
satisfying the criteria of the British Franchise Association.
We therefore used a company called Overview Mapping Limited, an approved
information provider of the BFA, to divide the UK into equal territories using the
criteria of the number of SMEs with employees of 1 to 75 and with a turnover of up
to the audit threshold.
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11. Each territory has approximately 10,000 businesses in it that meets the above
criteria. Therefore the size of a territory will vary depending on where it is in the UK.
For example, territories in London are quite small whereas a territory in
Northumberland is huge.
The important point is that irrespective of which territory you choose there will be
equal opportunity to develop an accountancy practice.
What do you mean by exclusive territory?
Quite simply we will not generate any appointments in a territory for anyone other
than the franchisee who purchases that territory. Even if a neighbouring territory to
an existing franchisee is vacant we will not generate an appointment for him/her in
that territory.
Therefore when you purchase an abacus franchise you can be assured that all the
data for that area is workable data.
Is it possible that an existing franchisee may have clients in my chosen
territory?
Yes, through referrals it may happen that a franchisee in a neighbouring territory has
a client in your territory.
For example, if a franchisee has a client and that client has a relative who also owns
a business, it is not unrealistic for the franchisee to be referred by his client to his
relative, if they were looking for a new accountant.
The relatives business may be outside our franchisee’s territory but it would be naive
of abacus to say to the franchisee that he/she can’t take on that client.
What we as the franchisor do is monitor the client base of our franchisees from the
monthly returns they submit, which lists their clients. By doing this we can ensure
that this situation does not happen on a regular basis.
Furthermore the franchise agreement does say a franchisee cannot directly solicit for
business in any other territory other than the one he/she has purchased.
The franchise licence is for 5 years. What happens at the end of 5 years?
The franchise can be renewed for a further 5 years. The cost to do this is £1,000.
This fee is to cover the legal costs of drafting a new franchise agreement and the
licence fee for a further 5 years.
How much is the licence fee?
The licence fee is £500. This is included in the original purchase price and is part of
the £1,000 renewal fee.
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12. What if I don’t want to renew the franchise after 5 years but wish to carry
on trading?
There is no obligation to renew the franchise, however, you could no longer trade as
abacus and would therefore have to change your company name.
You would no longer have access to the help lines or the ancillary services. You
would also have to change your phone number as the 0844 number belongs to head
office.
We would also be able to sell the territory to another accountant who would be a
competitor to you.
What if I want to sell the practice after 5 years? What restrictions are
there?
If you wish to sell the practice, as an abacus franchise the person purchasing the
business must pay the renewal fee to abacus Franchising Company and agree to the
terms set out in the franchise agreement.
Obviously as part of the renewal process we would vet the potential buyer and we
would always have the right not to renew if we thought he/she was not a suitable
franchisee.
If you wish to sell the practice without renewing the franchise agreement the same
rules apply as if you had not renewed. I.e. The new owner must change the
company name and return the 0844-phone number.
Again we would have the right to sell that territory to another accountant who would
become a competitor to the new owner.
What happens if, due to ill health, I am unable to look after the practice?
If you are unable to look after the practice due to ill health then as franchisor we
would appoint a manager to run the practice on your behalf until you were well
enough to return to work or, if a more permanent illness, until a buyer for the
practice can be sought.
The franchisee, through the practice, must pay the manager a salary and cover all
expenses incurred by the manager.
The proceeds of the sale will of course go to the franchisee.
What happens if I die during the 5 years?
As with the ill health situation we will appoint a manager to run the practice until a
purchaser can be sought. The proceeds now however will go to the franchisee’s
estate.
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13. What if I decide that I have made a mistake and wish to terminate the
agreement?
If this situation arises where you feel you have made a mistake you do have the right
to terminate, however, the franchisor is under no obligation to refund the franchisee
any part of the franchise fee.
Also as franchisor we have the option if deemed appropriate to claim specific
liquidated damages, as set out in the franchise agreement, from the franchisee for
early termination of the agreement.
In the case of termination due to death or incapacity the franchisor would not claim
liquidated damages against the franchisee or the franchisees estate.
If deemed appropriate we may purchase any capital assets off the franchisee
necessary to maintain a quality service to the clients of the business.
It is therefore very important that you fully consider the proposition before
purchasing a franchise.
Has anybody terminated an agreement and why?
Only a very small proportion of candidates have terminated an agreement and in
each case they admitted it was due to their own failings and not down to the service
provided by abacus.
Why do I need a Consumer Credit Licence?
Our network of alliance partners creates opportunities for our franchisees to help
their clients’ business by introducing other administrative services. Some of these
services such as financial services and insurance require you to have a consumer
credit licence. A copy of the application form is included in your statutory books.
The licence is a five year licence.
Why do I need to register with the data protection registrar?
The nature of the business we are in as accountants mean we have access to clients’
employees’ data, suppliers’ names and address and customer details. Protection of
this data falls under the Data Protection Legislation and therefore we are required to
be registered.
The current renewal fee you will have to pay in year 2 is £35.
In my second year do I have to use the same insurance provider for my
Professional Indemnity Insurance?
No you can use any insurance provider you like. If you don’t renew with the same
provider however you must provide us with a copy of your insurance so that we, as
the franchisor, know that you are covered.
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14. I must point out that our insurance broker has negotiated a very competitive price
for professional indemnity insurance on the basis that they are insuring a number of
franchisees. If you obtain a cheaper quote then I suggest you check the policy
before purchasing it as it may have inferior levels of cover.
In my second year do I have to use the same insurance provider for my
Employers Liability Insurance?
No you can use any insurance provider you like. If you don’t renew with the same
provider however you must provide us with a copy of your insurance so that we, as
the franchisor, know that you covered.
I must point out that our insurance broker has negotiated a very competitive price
for employer’s liability insurance on the basis that they are insuring a number of
franchisees. If you obtain a cheaper quote then I suggest you check the policy
before purchasing it as it may have inferior levels of cover.
Why do you use Nat West bank and is it compulsory for franchisees to use
Nat West?
First we would like to point out that abacus Franchising Company Limited does not
receive any introducer’s fee or commission from Nat West Bank just because the
franchisees bank with Nat West.
When we incorporated our business Nat West was most helpful. Mark Scott, Nat
West’s head of franchising, is also a board member of the BFA and was therefore
able to advise us on the structure and content of our franchise.
By all the franchisees banking with Nat West it will give abacus some bargaining
power with the bank when discussing services provided, bank charges etc, as the
bank wouldn’t want to lose a large number of accountancy businesses who are likely
to be introducers to the bank. The more franchisees we sign up the stronger our
bargaining position becomes.
That said we understand that some candidates may have loyalties to another bank
and do not wish to bank with Nat West. If this is the case please inform us at Head
Office when discussing the franchise.
Why do you register the franchisee’s Company for VAT immediately?
Doesn’t this position us at a disadvantage with our clients and
competitors?
abacus Franchising Company is VAT registered and therefore must charge the
franchisee VAT on the sale of the franchise. By registering the franchisee’s company
for VAT they are able to reclaim the VAT of £4,550.00 from HM Customs and Excise
at the end of their first quarter.
In the first year of trading we generate 100 confirmed and verified appointments for
franchisees out of bands A to D. These bands are based on turnover and the lowest
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15. band starts at the VAT threshold. Therefore all the companies you have
appointments with are VAT registered so the fact that you are registered for VAT is
not an issue.
Your main competition is the small and medium accountancy practices and very few
of these will have sales below the VAT threshold of £70,000 a year so they will also
be charging their clients VAT.
Exactly how much point of sale and promotional literature do we receive?
Schedule 4 of the franchise agreement lists all the initial material supplied. This is as
follows: -
500 Letterheads
500 Business cards
500 Continuation sheets
250 DL Envelopes with windows
250 DL Envelopes without windows
100 C4 Envelopes with windows
100 C4 Envelopes without windows
50 Presentation/Accounts front covers
50 Presentation/Accounts back covers
50 Brochures
Can we order additional stationery and brochures or do we have to find
our own printers?
Yes you can order additional items through the online stationers on both your and
our websites. The online stationer is Whitehill Publishing and all your templates for
letter head, business cards etc are all set up for you once you purchase the
franchise.
We do not allow franchisees to use their own printers as we must control the quality
and colour of the brand logos for the benefit of all franchisees.
What type of binding machine do you supply and how many binding coils
do we get?
We supply you with a Rexel Office Wire Binding Machine model number WB606
Flowline Pro Compact. We also supply 100 x 5mm white wire-binding elements.
As with stationery you can order additional wire binders from Head Office.
Is the 0844 telephone number one where clients would have to pay extra
to call me and why do I need it?
No the number is just a national number with normal local and national call rates.
Many of our franchisees commence running their practice from home. We have
therefore provided them with an additional phone line so that their home telephone
is not affected.
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16. Also when they do move into an office they simply take the business number with
them.
I already have an email address can I use this for the business?
No. Again it is all about building brand awareness so therefore we all use the same
email address.
What is the abacus intranet?
The abacus intranet is a secure password protected private area of the abacus
website. On the intranet is your personal calendar, which can only be viewed by
yourself and the call centre staff.
There is also a general area within the intranet that can be seen by Head Office and
all franchisees. In this area you will find the following: -
Forum This is a self help section where you can post questions and
other franchisees will post the appropriate answers.
Franchisee Details A list of all franchisee names and addresses
Manuals Copies of the 5 abacus manuals
Standard Letters All standard letters and forms in the manuals can be found on
the intranet.
Tax Tables Current and previous year's tax tables
Links to Websites Useful links to other websites such as Inland Revenue and
Companies House.
Alliance Partners Information about our other service providers
Newsletters Back copies of franchisees newsletters
As part of the induction course Paul Herring, our IT manager, takes you through the
procedure for using the Intranet and email system.
Are the help lines in VAT and Tax free to use?
Up to a point. For straightforward queries that can be answered within the hour the
help lines are free. If, however, the query is more complex and will take more than
an hour to resolve then the advisors will ring you back with a quote for the work.
Generally in these situations it is in your client’s interest to pay for the specialist
advice as it often generates tax savings.
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17. What manuals does abacus provide?
We go through the content of the manuals on the Induction course. An overview of
the manuals is as follows: -
Accountancy Manual
The manual contains an overview of the cycle of a client from new client to
accounts preparation and sign off.
There are standard letters to be used for a number of tasks including
professional clearance, year-end planning and accounts filing.
There are a number of checklists covering areas such as accounts preparation,
client meeting agenda and accounts completion.
There are also pro-forma accounts layouts for various types of businesses
such as dormant companies, sole traders, partnerships and limited companies.
Taxation Manual
This manual is broken down into two main sections personal taxation and
corporation tax. Each of the two main sections has a number of subsections,
which cover topics such as: -
- How to prioritise clients
- Tax year calendar
- Letters of Engagement
- Checklists
- Tax Rates
- Copies of forms.
Practice Manual
The practice manual starts by looking at the theory of running your own
business and running a practice. It then moves on to cover the practical issues
you will incur such as letters of engagement, forms required by the Inland
Revenue, how to incorporate a limited company and so on.
We also have standard consultancy agreements for sole traders, partnerships
and limited companies.
Again the manual has numerous standard letters and forms and a number of
procedures such as a money laundering.
HR Manual
All our HR procedures have been approved by ACAS. There is a
comprehensive list of procedures in the manual supplemented by the
appropriate forms.
The manual also includes a standard service agreement.
Page 17 of 31

18. Marketing Manual
The marketing manual takes you through the stages of marketing and
explains how to communicate your message. We also have a separate section
on PR.
The final section covers advertising and includes numerous abacus-advertising
styles that can be used by franchisees. These layouts range from a small black
and white two-column ad to a full A4 colour page ad.
If I leave the franchise do I have to return the manuals?
Yes, the manuals must be returned as they are effectively on loan to a franchisee
until they leave the network.
What is on the CD?
The entire manuals listed above are on the CD. Then as Microsoft Word documents
you will find all the standard letters, forms, contracts, check lists, etc.
Also on the CD are the pdf and quark file required by papers and magazines for
advertisements.
We also have all the tax tables on the CD so that you will always have them at hand
when visiting clients.
What is the content of the Induction course and how long is the course?
The course is five days long. It commences on Monday morning at 9.30am and ends
early afternoon on the Friday.
The course is structured to take you through the life cycle of generating clients,
looking after those clients, and then generating more.
Monday
Sessions include Call Centre
Intranet
Practice Management
Financial Services
Banking
Tuesday
The whole of Tuesday is dedicated to Sales and Selling including role play
sessions in the afternoon
Wednesday
This is the first of two days of “hands on” CCH software training. Wednesday
is dedicated to client manager and accounts production
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19. Thursday
The accounts produced on Wednesday are now used to prepare and file a tax
return using CCH software.
Friday
The final session is marketing. We look at marketing in general and how to
relate that to your practice
Do I have to sign up for the Franchise before coming on an Induction
Course?
No unlike many franchises we don’t expect you to purchase the franchise until after
you have been on the Induction Course. However, if you wish to start your practice
before the next available induction course you can purchase the franchise and then
come on the course.
The cost of the Induction Course is £1,250.00 plus VAT. If you decide not to
purchase a franchise after the course then the course fee is non refundable. If
however you do purchase the franchise then the cost of the induction course comes
off the franchise fee. I.e. the balance due to abacus for the franchise is £26,000 -
£1,250 = £24,750.00 plus VAT.
We hold our signing ceremony on the Friday of the induction course after the
marketing session.
Where are the induction courses held and will I need to organise a hotel?
All our induction courses are held at the Head Office in Sunderland. This gives you
the opportunity to meet other members of staff and see the Call Centre in operation.
As part of the Induction Course fee we organise and pay for your hotel for the week.
How often are Induction Courses held?
Currently we hold induction courses on a quarterly basis March, June, September
and November. The course is normally the second week in the month.
How many candidates do you have on a course?
We will have a minimum of 2 candidates on a course with a maximum of 6.
If I am interested in coming on an induction course how do I reserve a
territory?
The only fair way to allocate territories is on a first come first served basis.
The only way you can therefore reserve a territory is to pay for the Induction course.
At this point we will reserve the territory of your choice (provided it hasn’t already
been sold) even if the course you are coming on is not for a few months.
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20. For example, in October you decide you would like to come on an induction course
but because of existing commitments you are not able to attend a course until
March. Provided you pay the course fee and tell us which territory you would like to
purchase then that territory is reserved for you until you have been on the March
course. Even if later in October somebody who can come on November’s course
wishes to purchase the same territory it will remain reserved for you.
Will I be expected to pay for the franchise at the end of the induction
course?
This would be great if you could but realistically we understand it may take a couple
of weeks to draw down any loan you may have organised before coming on the
course.
Ideally if you come on Novembers course (second week of the month) we would
expect you to be able to pay by the end of November.
We will not commit to purchasing data, software and so on until you have paid so
the sooner you pay the more quickly we can have you up and running.
Do I wait until I have been on the induction course to organise funds to
pay for the franchise?
No, this will only delay the start of your new business.
As I am sure you appreciate we cannot incur expenditure forming a company buying
data and so on until you have paid for the franchise.
It is therefore far more advantageous to talk to the lender before you come on the
course. Ideally you need to know that the loan has been approved in principal before
attending the course.
If after being on the course you decide not to purchase the franchise you will not
incur any charges for having the loan agreed in principal. It is only if you draw down
the loan that you start to incur costs and interest.
Do you provide assistance in obtaining a loan?
It is the responsibility of each individual to ensure they have the funds to purchase
the franchise.
However, we do have relationships with a number of providers who will, subject to
personal circumstance loan funds to our franchisees.
LDF Professions are a private broker company that only funds professional people.
They have agreed to fund franchisees with unsecured personal loans to the value of
the franchise plus working capital. The repayment profile of the loans is 3 – 5 years
dependant upon your personal preferences. Our contact at LDF is Aaron Leclercq his
telephone number is 01244 527300.
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21. We have also negotiated with Nat West bank and, subject to personal circumstances,
they will loan a candidate 65% of the required funding which includes the franchise
purchase price and some initial working capital.
The loan is a flexible loan spread over the 5-year life of the franchise.
The contact at the bank is Mr Shanul Ishmail (phone number 0800 092 9117).
Shanul works in THE Natwest Franchise Section reporting to Mr Mark Scott.
Details of the franchising section of other banks are as follows:
HSBC Contact: Mr Ken Braddock
Franchise Unit Tel: 0121 455 3438
12 Calthorpe Road Email: Franchiseunit@hsbc.com
Birmingham Website: www.hsbc.co.uk
B15 1QZ
Lloyds TSB plc Contact: Mr Richard Holden
Franchise Unit Tel: 02920 355 971
2nd Floor Email: Franchising@lloydstsb.co.uk
Northgate House Website: www.lloydstsbbusiness.com
Kingsway
Cardiff
CF10 4LD
The Royal Bank of Scotland plc Contact: Denise Aitchison
RBS Franchise Section Tel: 0800 092 9117
Level 2 Email: franchiserbs.retailbanking@rbs.co.uk
2 Waterhouse Square Website: www.rbs.co.uk
138 – 142 Holborn
London
EC1N 2TH
Nat West Contact: Shanul Ishmail / Mark Scott
Natwest Franchise Section Tel: 0800 092 9117
Level 2 Email: franchise.retailbanking@natwest.com
2 Waterhouse Square Website: www.natwest.com/franchise
138 – 142 Holborn
London
EC1N 2TH
Clydesdale Bank, Yorkshire Bank, Bank of Scotland and Barclays Bank do not have a
dedicated franchise division. In these instances please contact your local branch
manager.
Alternatively a number of franchisees have re-mortgaged and added the cost of the
franchise to their mortgage. If this is of interest our sister company abacus ifa
Page 21 of 31

22. Limited could organise this for you. The person to contact is Mr Neil Richmond on
0844 050 2254.
How much working capital do I require?
As you can see from above as part of the franchise fee we effectively set up your
practice. The only additional costs you will incur are a small amount of general
stationery, some initial advertising, telephone, fax and mobile phone costs and
petrol. All in all this should add up to no more than £5,000 in your first year.
What you do have to accept, however, is your income will be very small for the first
6 months as you build up your client base. So when calculating your working capital
requirements you should build this in. Each franchisee’s individual requirement is
different so you will have to calculate this for your self.
Do I wait until I am ready to start a franchise before coming on an
induction course?
There are a number of practical issues such as incorporating the company, ordering
data, organising telephone installation, organising software installation and so on
that can only take place after you have purchased the franchise.
Therefore in reality it will take the best part of a month after signing up that you will
be in a position to go on your first appointment.
The second point to bear in mind is that the 5 years only commences on the date of
your first appointment and not on the date you sign the franchise agreement.
It is therefore best to come on an induction course at least one month (preferably
two) before you wish to commence trading.
How can I find out which territories are available?
You need to go to the following website www.territorymapping.co.uk once here you
will then be confronted with a screen asking for a user name and password.
The User Name is abacus
The Password is st3v3
This will take you into our map of the UK with the territory borders marked on it.
At the top of the screen you will see a row of icons, click on the binoculars and this
will bring up a search engine. Type in your town and press enter. This moves the
screen to that part of the map. Using the magnifying glass with the + sign in it will
enlarge the territory you are interested in.
If the territory is shaded in purple then it is sold, otherwise it is still available.
Page 22 of 31

23. Who installs the software?
All the CCH software is simply to install but you will be given a help line number
direct to one of their specialist engineers who can talk you through any issues you
may have.
Paul Herring our IT Manager will also be on hand to advice you.
As with CCH the Sage line 50 software is easy to install but again a help desk is
available for any required trouble shooting.
What support do we get from CCH?
CCH has appointed Gareth Potter as the abacus accounts manager and he has
prepared a manual for all our franchisees, which covers the following areas: -
Contact details for support, sales and engineers
Procedure for implementing the CCH Software
List of training centres throughout the UK
Additional product price list
If any of our franchisees has an issue with CCH Gareth is there to resolve any
problems as quickly as possible.
Similarly Andy Gibb is our account manager at Sage and he can provide you with
prices of software you may wish to sell to your clients.
More details of software support will be given on the induction course.
As I grow my practice can I increase my user licences on the CCH and Sage
products?
In the case of CCH if your client list exceeds 150 then the monthly cost of their
software increases by £60 per month. However this is the only increase as the
upgrade allows you to have an infinite number of clients.
With Sage the cost of line 50 software increases in increments of 25 clients Andy
Gibb will provide a price matrix on request.
Do I get any training material from CCH?
Yes, two of the days on the induction course are dedicated to CCH and when you
purchase the franchise you keep the training manuals used on each day. CCH hold
regular regional training courses as well and abacus franchisees can receive extra
training at a significantly reduced price.
Is there a list of ancillary service providers?
Schedule 1 of the franchise agreement lists the current providers however we are
looking to add to the list on a regular basis. Franchisees are informed of any changes
to the list on an ongoing basis.
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24. If there is a service a client requires that is not on the list contact Head office who
will either know somebody who provides the service or will find somebody.
Can I use my own associate partners?
We have vetted all our providers so that your clients can be confident of the quality
of service provided will be value for money.
If you have an associate you would like us to add to the panel we would be more
than happy to review them.
Do I get commission if any of my clients use the alliance partners?
Yes, our franchisees receive commission when the client pays for the service
provided by the alliance partner.
The amount of commission varies from partner to partner.
The process for payment to franchisees is as follows: -
The alliance partner pays abacus all commissions due to franchisees. All commission
received up to the 25th of the month is paid to the franchisees on the last day of the
month.
Who do I contact at Head Office to organise one of the alliance partners to
meet my client?
Steve Jackson is based at the Head Office and can assist franchisees on all
accounting issues as well as ancillary services.
Also at Head Office is the office manager Kay Phillips who will ensure all requests are
dealt with in a timely and efficient manner.
What IT equipment do I require?
Schedule 5 of the franchise agreement lists the minimum specification required for
your PC, printer, software and Internet connection.
1. Minimum PC Specification
Processor Intel Celeron, 2.4 GHz or higher
Colour Monitor (1024x768 resolution)
80G Hard Drive
CD-ROM
DVD-ROM (desirable)
RAM 512 MB (1024MB preferred)
2. Specification of Printer
Any inkjet or laser printer
3. Software
Page 24 of 31

25. Microsoft Windows 2000 Professional or Windows XP Pro (recommended)
Microsoft Office 2003 Basic (with Word and Excel)
Strongly Recommended – Firewall and Anti-Virus Software
4. Internet Connection
Broadband Internet Connection (where/when available) or
Dial up Internet Connection (where Broadband is not available)
Does abacus have anyone who could advise me to ensure my PC meets
your specification?
Paul Herring our IT manager would be happy to discuss your equipment
specification.
Do you have any minimum performance targets?
Yes the table below lays out the minimum performance targets.
Year end Cumulative Gross Sales
1 £25,000
2 £50,000
3 £60,000
4 £70,000
5 £80,000
What happens if I don’t meet the performance targets?
In the event that the Franchisee fails to attain the performance targets, the
Franchisor may:
1 Require the Franchisee to attend further training in relation to the Business
as the Franchisor may specify (all costs related to such further training to
be borne by the Franchisee);
2 If after further training the Franchisee still fails to meet the minimum
performance targets then the franchisor will permit the Franchisee to
continue to operate the Business in accordance with the terms of this
Agreement except that the exclusivity provisions in relation to the Territory
shall not apply and the Franchisor shall be permitted to appoint additional
franchisees to operate in the Territory.
Page 25 of 31

26. Do I need to open an office as soon as I commence trading as an abacus
Franchisee?
No we believe in keeping your overheads as low as possible. Most of our franchisees
commence trading whilst working from home.
As you grow your business you will arrive at a natural point when it is in the best
interest of your business to progress to an office.
There is no time scale within the franchise agreement that says you must be in an
office by a certain date.
When you do move into an office you would not be expected to move into a shop
front premises.
What are the management/royalty fees and when do they have to be paid?
Section 15 of the franchise agreement details the procedure for payment of royalty/
management fees. The table below lists the payment structure.
Payment Period Fixed Additional
Management Management
Charge Charge
Opening Date to £2,500 or 10% (ten Nil
Opening Date plus 12 percent) of Gross
(twelve) months Sales (whichever is
the lower)
Opening Date plus 12 £5,000 (a) 5% (five per
(twelve) months and cent) of Gross Sales
1 (one) day to Paid by 12 equal in excess of £50,000
Opening Date plus 24 monthly instalments but less than
(twenty four) months of £416.67 each £150,000; and (b)
3% (three percent)
of Gross Sales in
excess of £150,001
during the period of
(i) Opening Date
plus 12 (twelve)
months and 1 (one)
day and (ii) Opening
Date plus 24 (twenty
Page 26 of 31

27. four) months
Opening Date plus 24 £6,000 (a) 5% (five per
(twenty four) months cent) of Gross Sales
and 1 (one) day to Paid by 12 equal in excess of £60,000
Opening Date plus 36 monthly instalments but less than
(thirty six) months of £500.00 £150,000; and (b)
3% (three percent)
of Gross Sales in
excess of £150,001
during the period of
(i) Opening Date
plus 24 (twenty four)
months and 1 (one)
day and (ii) Opening
Date plus 36 (thirty
six) months
Opening Date plus 36 £7,000 (a) 5% (five per
(thirty six) months cent) of Gross Sales
and 1 (one) day to Paid by 12 equal in excess of £70,000
Opening Date plus 48 monthly instalments but less than
(forty eight) months of £583.33 £150,000; and (b)
3% (three percent)
of Gross Sales in
excess of £150,001
during the period of
(i) Opening Date
plus 36 (thirty six)
months and 1 (one)
day and (ii) Opening
Date plus 48 (forty
eight) months
Opening Date plus 48 £8,000 (a) 5% (five per
(forty eight) months cent) of Gross Sales
and 1 (one) day to Paid by 12 monthly in excess of £80,000
Opening Date plus 60 instalments of but less than
(sixty) months and £666.67 £150,000; and (b)
each consecutive 6 3% (three percent)
(six) month period of Gross Sales in
thereafter excess of £150,001
Page 27 of 31

28. during the period of
(i) Opening Date
plus 48 (forty eight)
months and 1 (one)
day and (ii) Opening
Date plus 60 (sixty)
months
Are there any other costs other than management fees?
From year 2 it is the franchisees responsibility to maintain: -
Data Protection Registration
Professional Indemnity Insurance
Employers Liability Insurance
CCH Software Licence
Sage Software Licence
KashFlow Accountancy Program Subscription
CRM Licence Fee
Quotation Licence Fee
The only other cost is an annual advertising levy of £400. The levy is due for
payment on the anniversary of the agreement.
How do I find my clients?
To ensure the quality of appointments generated for our franchisees abacus has
enlisted the support of two call centres one in Sunderland (in fact based in the same
office complex as abacus Franchising Company) and one in Chester.
Both call centres work to strict guidelines and scripts developed over the past five
years. They answer the phone and make calls as abacus and are responsible for
generating one hundred confirmed and verified appointments in the first year from
Bands A to D.
Both call centres are vastly experienced and we will give you the opportunity to listen
in on calls being made during the induction week.
As part of the training week you will be given advice on how to market your business
in your area.
Do you confirm and verify the appointments generated by the Call Centre?
Yes, all the potential clients have been contacted by our Call Centre 3 times before
the franchisee goes on an appointment.
We believe the call centre is one of the main keys to the success of our franchise.
Page 28 of 31

29. Do you contact the potential client after the franchisee has been on the
appointment?
Yes, after about 2 weeks we contact the potential client again, this time as the
abacus-marketing department. Any feedback we receive from this call is fed back to
the franchisee.
Can I continue to use the Call Centre after receiving my initial 100
appointments?
Yes we have sufficient data to generate at further appointments. The franchisee can
purchase the additional appointments in minimum batch of 10 appointments (cost of
£95 per appointment).
How are the Call Centre bands broken down?
The bands are broken down by turnover and we generate appointments by the
bands as per the following table
Number of
Band Annual Turnover of Potential Client
appointments
Band A More than £750,000 10
Band B Between £250,000 and £750,000 18
Band C Between £100,000 and £250,000 53
Band D Between £60,000 and £100,000 19
What fees do I charge clients?
We will give you guidance on what to charge clients but ultimately the decision is
yours. Our guidance is based on information provided by our existing franchisees in
your region.
Do franchisees have to prepare monthly returns to Head Office and why?
Yes franchisees must complete a monthly return issued by Paul Herring our IT
Manager.
The return details clients won, business type, turnover, accountancy services
provided and fees charged.
This data helps us to build up information on how a franchisee is performing and
helps us identify where a franchisee requires help.
Page 29 of 31

30. The data also allows us to help guide new franchisees in pricing their first few
contracts based on what existing franchisees have charged similar clients in the
same region.
Finally we use the data to find new ways in which to support clients.
For example we can remove the names of clients then sort the data by industry type.
We then contact our Insurance provider who in turn can approach insurance
providers such as Norwich Union to quote abacus for an employer’s liability insurance
policy for engineering businesses. As a network we may 50 engineering businesses
so the insurance provider will discount the policy. Individual franchisees may only
have 1 or 2 engineering businesses but because the network has 50 they are able to
offer their clients a discounted insurance policy.
The client is happy, he has received a reduction in his insurance premium, the
franchisee, franchisor and insurance broker are happy as they receive an introducers
commission and the insurance provider is happy as they are receiving several
insurance policies.
What ongoing help will I get and from whom?
The role of Head Office is to support franchisees, identify problems and provide
solutions.
We will always take the franchisee through each of his appointments on a regular
basis reviewing the feedback received via the call centre. He will also review the
monthly returns supplied by the franchisee.
If in discussion with the franchisee it is agreed further training, on Sales and Selling
(for example), is required Head Office will organise this. If IT support is needed on
the Intranet the IT manager will provide this and so on.
Is the business seasonal?
No. Companies have various year-ends through out the year however there are
certain peak times such as January. January is a busy time, as all tax returns must
be submitted by 31st January.
What hours will I be expected to work?
Normally you will be expected to work standard office hours of 9am – 5pm. However
in peak times you can expect to have to work longer hours. You have also got to be
prepared to be flexible and fit your hours around the needs of your client base.
Do I have to pay for my own local advertising?
Yes it is the franchisees responsibility to carry out their own local marketing and
advertising. We will support you and in the marketing manual you will find various
advertising layouts and ideas for promotions and fliers.
Page 30 of 31

31. We also have a stand, which can be borrowed by franchisees to use as a display. Our
office manager Kay Phillips will be more than happy to assist you in any promotional
activity you wish to carry out.
What happens if I already have clients?
We would expect you to transfer those clients into the new abacus business.
However, we would ring fence these clients and not include them in any calculation
for management charges.
Obviously you would be able to offer all the other ancillary services to your existing
clients.
Why are there 3 parties to the franchise agreement? Who is the
guarantor?
The agreement is between abacus Franchising Company Limited (the franchisor) and
the limited company incorporated for the franchisee (e.g. abacus 123 Limited).
As a limited company is a separate legal entity the franchisee is actually the limited
company (in this example abacus 123 limited).
Because of this we require the person who is purchasing the franchise to sign the
franchise agreement as the guarantor. By doing this it ties in the three parties to the
franchise agreement; you, the limited company we set up for you, and us.
Now I have looked at the presentation on the CD read these questions and
answers, what do I do next?
The next stage is to visit head office and attend one of our “Get To Know Us Days”
Following the visit to head office if you are still interested in our franchise
opportunity we will introduce you to 2 – 3 of our existing franchisees and give you a
copy of the franchise agreement to seek advice on.
The final stage is to book a place on one of our quarterly induction courses. To book
your place send a cheque made payable to abacus Franchising company limited for
£1,250.00 plus VAT (£1,468.75) to the following address: -
3a Colima Avenue
Sunderland Enterprise Park West
Sunderland
Tyne and Wear
SR5 3XB
Don’t forget to inform us which territory number you wish to reserve.
Page 31 of 31