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New Supportive Funding Model for the New Franchising World

The New Supportive Funding Model for the New Franchising World

Our new Service Franchise Facility is Open For Your Business.

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.

WHAT IS THE MARKET?

We ARE NOT ‘the lender’, though we already supply Australia’s best Service Franchise finance solution.

We ARE NOT ‘finance brokers’, though we operate Australia’s only national Advising Financier network for franchise finance.

We ARE the Franchise Finance Market and our sole purpose is to optimise the franchise finance solutions for Market participants.

Optimised products means a pragmatic balance between stakeholder groups (franchises, franchisees and lenders) for maximum stakeholder benefits.

Why lenders are backing the Service Franchise Facility

The availability and pricing of franchise finance comes down to four things:
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.

Financial Benefit to Franchisor

At first, you might expect the Service Franchise Facility to be an expensive solution to financing your franchisees.  When you consider all the benefits it delivers over what is available in the market elsewhere, along with the initial set-up costs because SFF needs a very specific structure, then there is the annual Market Participation Fee and possibly even the need to supplement some operating  costs in the first year or two.

We knew all the benefits that SFF could deliver, so many that the category A franchise systems would willingly meet the financial costs.

But, our goal is not only to improve funding for the category A franchises.

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.

  1. 45% bigger network
  2. 23% extra revenue
  3. 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.

Increased Network Size

Increased Franchise Revenue

Save on Operating Costs

Grow a New Network Asset

Finance Access Commitment

No Home Mortgage Security

FINANCE PRODUCTS

Service Franchise Facility

Available Now

Partnering Franchise Facility
We're working on it

Franchise Refurbishment Fund
We're working on it

Retail Franchise Facility
We're working on it

Franchise Resale Facility
We're working on it

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