Jun 17, 2023 2 min read

Beware of the fine print - Lease and Location Management Systems are Franchisors Best Friend

How lease accounting software is saving franchisors a ton of cash
Beware of the fine print - Lease and Location Management Systems are Franchisors Best Friend
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Being a mentor and serving on boards of Branded partner companies has given me a front-row seat to witness the amazing evolution of products and the constant need for refinement. As an early-stage investor, I see the relentless hard work required to stay ahead of the game. We always focus on monitoring competitors, embracing new advancements, and listening to customers. However, one aspect that can be easily overlooked is the impact of laws imposed by the big players in the industry. Yep, you always have to keep an eye on the BIG GUY. You don't want to find yourself in a legal pickle!

Let me give you an example: In 2022, a new lease accounting standard was introduced, mandating leaseholders to record most leases on their balance sheets. This meant documenting lease liabilities and corresponding right of use assets. Additionally, lessees had to make changes to their systems and processes. Naturally, this made lease financial reporting more complex, and commercial tenants sought help from CPAs and experts to navigate this new landscape.

Now, I'm no expert but it seems like restauranteurs and franchisors have their work cut out for them with having to store data such as leases, licenses, permits, assets, franchise agreements, contact details, and more.

Luckily, lease accounting software has become so sophisticated that hiring a CPA for $200 or more per hour isn't all too necessary.

Technology, like Branded portfolio company Leasecake, eliminates the need to hire a CPA for high hourly rates. Let's crunch some numbers: Imagine managing 50 leases with an average implementation time of one hour per lease, and monthly reporting time of 15 minutes per lease.

With a CPA, you'd need a total of 50 hours for implementation and 150 hours for annual year-end disclosure reporting, totaling 200 hours. At $200 per hour, that could cost you up to $40,000.

But with Leasecake, the total implementation time is just 5 hours, and you only need 3 hours for annual reporting, making it a total of 8 hours per year. This means this solution can save you up to 45 hours in implementation time, up to 147 hours in annual reporting time, and a total of 192 hours each year.

In the first year alone, you could save up to $37,500, and on an ongoing basis, that's up to $30,000 in savings. Seems like a good deal to me!

As I said, advancement in any company you build is important and in particular new partnerships help startups provide customers with the best possible solutions. Just like Leasecake's recent partnership announcement with David Energy. The partnership is providing clients with improved visibility and control over their operating expenses, including lease and location management as well as streamlined energy operations.

In celebration of their partnership, new customers of each platform will be offered exclusive discounts to the other platform, enabling a synergy between the two offerings via discounts and incentives.

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