Franchise Finance Products
We believe there are 6 finance products that will satisfy the majority of franchise finance scenarios.
As a Market seeking Optimal solutions our role is not to be the lender, but to find and maintain the optimal finance solutions.
That is why we are striving to develop and deliver all 6 finance products to cover most franchise finance scenarios.
Such a goal would be impossible for all but the biggest banks. But we are not the lender and we will happily utilise any suitable lender that will provide finance under the optimal financing structure. As such they are planned to be ‘joint-label’ products because while they will carry the Franchise Support Market label we are not and will not be the lender.
This is in keeping with our Fourth Principle of Operation: Work to replace any joint-label product partner that stops lending; as quickly and seamlessly as possible and with minimum disruption to clients.
This fourth principle is not our bagging the lenders. They have legitimate needs to vary and reweight their portfolios from time to time. However, if you are dealing directly with them this leaves your franchise ‘out in the cold’ and often without any notification.
A versatile, open franchise finance structure invites existing and new lenders to the franchise lending space. We will give them the tools, structure and relationships to make it faster and easier to enter and even leave the space.
Bonus: if they have to suddenly leave the space for some internal credit reason they don’t burn any franchise relationships.
Being able to move lenders in and out of the optimised franchise finance structures will be a great outcome for franchises, lenders and franchisees.
That probably sounds unusual, launching a new funding product during the time of the most abrupt and rapid change in business during most of our lives, however as we have watched the available credit rapidly close to new Franchise business (excepting government backed cashflow-funding on tough terms) we have had repeated calls for us to proceed with our new, more supportive and collaborative, funding structure.
1. Ability to repay loan;
2. Willingness to repay loan;
3. Security protecting against loan default; and
4. SME premium.
Working in conjunction with all stakeholders over four years our Service Franchise Facility, arguably, goes further to address and reduce all four of these fundamentals (where other solutions might make a small enhancement to only one area).
Successfully addressing these fundamentals is a big deal and has a major impact on finance profitability for lenders, thus a growing level of lender support for the Service Franchise Facility.
You can see our simple presentation explanation HERE.
When we finally knew all of the costs to deliver SFF we crunched the numbers to see what the pain would be, financially. Fortunately, some big franchise clients were very helpful in this exercise.
They pointed out the cost of finding qualified candidates (advertising, staff support, assessment) and the loss rates of candidates to finance problems.
By the time we finished crunching the numbers we were astounded with the results. Not only would an average franchise make a lot more revenue, they would save a lot in operting costs.
- 45% bigger network
- 23% extra revenue
- Over $500,000 saving in operating costs.
Every franchise needs to do its own research and perform their own assessment. If you want to see the numbers that gave us that result you can download our Cost Vs Benefit Analysis.