A new firm is entering the accounting profession – the operating company Franklin Alliance, which has announced its first deal with Bement & Company CPAs of Bountiful, Utah.
Franklin Alliance, in an announcement today, states that is unlike traditional private equity or large CPA consolidators because it is an operating company (not a fund), which offers a hybrid model that “combines the benefits of scalability and operational support with the preservation of local firm identity and culture.” In partnership with entrepreneurial CPA firms of $10 million or less, Franklin Alliance provides the resources for growth and addresses issues such as succession planning, human capital solutions, growth and technology adaptation.
Smaller firms are often overlooked by private equity and can struggle more than other segments to adapt to the newest technologies, states Steve Shein, Franklin Alliance co-founder. “We are here to change all that. We don’t view boutique firms as add-ons to larger firms; we view them as firms with a unique culture and legacy that should both endure and thrive for generations to come.”
Bement & Company owner Brent Bement said, “Small to mid-sized business owners, investors and individuals are often underserved, caught between tax preparation shops that provide little strategic value and large corporate CPA firms that lack personal attention. While exploring potential CPA platform partnerships, I found many did not share my vision: to add real value to clients and employees while having sustainable growth without sacrificing the personal touch. That vision is what drew me to the Franklin Alliance and why I’m proud to be a co-founder, strategic advisory board member and investor alongside exceptional partners.”
The influx of private equity capital into the profession provides resources for growth, but it can also bring rigid corporate structures and cultures at odds with traditional CPA firms. Consultant Allan Koltin, CEO of Koltin Consulting Group, notes that private equity’s involvement can shift the profession’s ethos, sometimes pressuring client relationships and employee satisfaction. “The Franklin Alliance model is uniquely positioned to add value to firms in this segment. Franklin’s structure as a VC-backed operating company allows it to avoid the constructs and potential constraints of traditional private equity funds. I view Franklin’s model as especially beneficial for accounting firms in the smaller segment of the market, where firm cultures are normally less institutionalized.”
Former Wipfli MP Rich Dreher, a strategic advisor to the Franklin Alliance, commented, “I find this unique platform approach, specifically targeting smaller firms often overlooked by larger firms and private equity in their roll-up strategies, to be particularly intriguing.”
The Franklin Alliance asserts that is has several other accounting firms under contract.
