Franchise Advice
“Banks appreciate the advantages that an established and ethically- run franchise can deliver”
as 100 per cent guarantee of success, in comparison with other types of start-ups, the level of closures suffered by franchisees is relatively low
• Lenders understand the costs involved in starting-up and will be able to advise on a good business plan, drawing on their experience of working with existing franchisees that bank with them
• The advantages of an established brand and the inbuilt marketing power of a franchised business bestow a readymade profi le that other small businesses would struggle to achieve
• The systems that the franchisee adopts may include controls and reporting, which could enable the bank to obtain timely and accurate information on how the franchise is performing
• Research and development is largely carried out by head offi ce, therefore
franchisees can focus on developing their business in the knowledge that the overall future direction of the business is looked after
• Franchisees themselves have normally carried out a high level of research and due diligence in order to establish the suitability of the franchise in which they are investing
What are the capital-raising benefi ts to franchising for the franchisee? • Banks with a good understanding of franchising will have a dedicated franchise team making the whole process of raising bank fi nance and opening an account more straightforward
• The amount of fi nance that the bank may provide could be higher than that offered to a non-franchise start-up
depending on the track record of the franchise
• There may be other related banking products which are offered on special terms to franchisees
The most important thing is that you fully research the franchises that you are interested in. Make sure that they are well run and done so on an ethical basis. Also determine whether you can work with the franchisor and that you will enjoy the challenge – starting up any business, franchised or not, is hard work!
Graeme Jones
Graeme Jones is head of franchising at NatWest. For more information call 0800 092 9117 or visit
www.natwest.com/business
April 2012 |
Businessfranchise.com | 17
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