Franchise buyers who choose to capitalize their business with a Rollover as Business Startup (ROBS) can’t just jump right in. Setting up and administering a ROBS structure requires knowledge of complex legislation and IRS requirements. By Max Mawhirter
Franchise buyers who choose to capitalize their business with a Rollover as Business Startup (ROBS) can’t just jump right in. Setting up and administering a ROBS structure requires knowledge of complex legislation and IRS requirements. If things go wrong during this process, the buyer could owe thousands of dollars in tax penalties and legal fees, on top of jeopardizing the business launch or growth. As an industry-leading Third-Party Administration (TPA) of ROBS plans, Tenet Financial Group suggests these tips when researching TPAs.
What to look for in a ROBS Administrator
Experience: Choose a company with thousands of plans and happy clients.
Successful track record: Inquire about how many of the company’s plans have been audited or flagged for non compliance. A successful track record matters because improper setup and non compliance is detrimental.
Fast funding: A reliable TPA can make the ROBS installation process quick and simple, resulting in more closed deals for both the franchisor and the consultant.
Great service: The TPA should remain in contact with the buyer, the consultant and the franchisor throughout the process and after the plan is set up to make sure everything is running smoothly.
Other funding expertise: Working with a TPA that offers diversified funding options in addition to ROBS, such as SBA Loans, helps you streamline your funding together more easily.
Tenet Financial Group has more than a century of experience successfully administering ROBS to help aspiring entrepreneurs launch their franchises. No client of Tenet Financial Group has ever been audited by the IRS because we don’t take shortcuts, ever, when advising our clients. Our team focuses on consultation, not sales, ensuring that the buyer is able to make an informed decision about their franchise funding needs. Once the plan is installed, our clients work with the same plan administrator throughout the life of their plan, creating a great working relationship right from the start.
For more small business tips, visit the Tenet Financial Group blog at tenetfinancialgroup.com/blog.
– Max Mawhirter
Max Mawhirter joined Tenet Financial Group as a Senior Consultant in 2021 and has nearly three decades of financial services experience. His unique understanding of franchising makes him a great partner to FranServe consultants and their clients. Max can be reached at max@tenetfinancialgroup.com and 254-672-3025.