AN EXCITED, satisfied Karl Sandall spoke to Accountancy Age after signing a deal for what has been described as a ‘franchisee-assisted management buyout’ – or a FAMBO.
In a highly unusual deal, more than half of the 190 TaxAssist Accountants franchisees have bought into a deal to take a stake in the franchise – giving them a 32% holding in the business with three executives – including chief executive Sandall-owning 53%.
Despite the seismic shift in ownership, the direction of the franchise will remain unchanged, which will include spreading the geographical reach into new territories.
“We will stick to our core values and strategies. We’ve no intention of changing the model and what we stand for,” Sandall said.
But there is a big question about how the relationship will work between share-holding franchisees, the board and non-share-owning franchisees. Does TaxAssist risk building a fractured ownership model that has proved such a problem at the Co-operative?
Sandall points out that the franchisees are not looking to become franchisors, but to invest in what they see as a successful and growing business in which they are a part.
A non-executive will represent all franchisee interests on the board. Simply put, some franchisees will be shareholders, and others not – but they will be represented as a whole.
Good will and belief from the franchisees has led to this structure, Sandall points out.
“The franchisees work and breathe the brand, who better to own a share of that?”
If the franchise had been sold to private equity, “would they hold franchisees in the same interest?” he asks rhetorically.
“There isn’t one shareholder taking out a big dividend.”
The next big issue that the franchise faces is how it administers an internal market for shares. This project will be run in-house: “We’ll learn on that one”.
Adrian Hyde, a partner at CVR Global, has been appointed as the new president for a year-long term, effective 21 April this year
Richard White, Nicola Westbrooke and Richard Ross all join from KPMG, where they oversaw the real estate tax practice
Sheryl Davis joins the firm's High Wycombe office from Barnes Roffe
The appointments have been made across the VAT, audit and international tax teams