What Records Should Franchisees Always Keep?

You've likely heard a lot of tips and tricks for franchisees at this phase of your search, and you've already learned a lot of useful things. But, as with any business, there is always more to learn. As a franchisee in Canada, you will be responsible for more than just the daily operations of your business; you're also in charge of some very important records.


Accounting records

Your accounting records are the ledger of all your business transactions, including information about all expenses, equity and income. Not only will you need these records for the franchisor and for tax reasons, you should also track them to discover very important information about your franchise. These records will show you the financial health of your business, allow you to measure its profitability over time, and display patterns that you can identify to make wiser business decisions. You'll also need accounting records past and present to determine if your current budget is working.


Bank statements and other financial documentation

Bank statements and other account statements show you exactly what is moving in and out of your business. Compare these to your accounting records to stop potential problems, such as missing funds.


Legal business documents

Business documents for a franchise include the franchise agreement and also anything related to the legal formation of your particular franchise. Always keep these records stored somewhere safe; you never know when there is going to be a dispute over franchise agreement terms or you will need to provide proof of ownership for the business.


Licenses and permits

Depending on your franchise, you may need different types of permits or licenses to operate. As with legal business documents, you never know when someone--such as a provincial authority--may ask to see your license or permit.


Insurance documents

Last but certainly not least are any insurance documents related to your business. Insurance is meant to cover the unexpected, so you will not usually have any warning in advance that you will need them. Have all your insurance documents stored in at least two safe places--at your business and at an outside location in case your business is damaged, such as in a serious fire.

If you've never run a business before, you may be surprised by all the records you need to keep. Create an organizational system for your important records right at the beginning. If you are going digital, make sure you work with IT professionals to have a backup system in place in case your data is damaged or lost.