Royalties, rights & unique accounting: Why franchising benefits from Microsoft Dynamics GP

Perhaps when you hear the word "franchise," you think of McDonalds.

You would be correct, but franchising goes far beyond fast food. A quick check with the American Association of Franchisees and Dealers (AAFD) reveals franchises for sale in:

• Food and bars
• Florists
• Apparel stores
• Convenience stores
• Child care
• Service businesses, including health, hotels, as well as finance, banking, loans, engineering services.

There are even franchise opportunities in internet businesses and some manufacturing. If you've had Servpro clean up a basement flood or had your brakes changed at Meineke, you have visited a franchise, owned by a franchisee and purchased or licensed from a franchisor. You'll find an artisan leather manufacturing franchise for sale in Boulder, Colorado, for $99,000, with a revenue potential of $4 to $5,000 per week (which frankly seems high for specialty goods in a seasonal destination).

Franchising calls for meticulous accounting on both sides, be it from the franchisee or the franchisor. As a fast-food franchisee grumbled to us, "Whatever revenue potential you hear, divide by two. Start by subtracting your take-home pay." More successful owners chalk success up to right time, right place; right choice for the economy; and laser-focused accounting.

We learned about franchising from Joe Lerro, president of Eclipse Computing in the US, with additional offices in the UK and the Netherlands. Eclipse Computing has long offered ...