FRANCHISEE CASE STUDY
Two of our clients had excellent businesses with growing sales; however, they appeared to be unprofitable. Each of the clients wanted to open new stores but was unable to secure financing because their financial statements indicated that they were losing money.
After our thorough review of the actual entries and accounting practices, Strategic Business Group determined that the stores were in fact profitable. It was determined that the owners did not understand some basic accounting practices and they were making entries that overstated the cost of goods thus creating an operating loss. The same entries understated the assets. These actions caused their lender and prospective lenders great concern.
After we corrected the accounting errors we were able to secure for our clients, the franchisees, financing for their second stores. Both clients received SBA guaranteed 7-year loans for approximately $150,000.