FRANCHISEADVICE
Show me the money Cathryn Hayes on how to help your franchisees obtain finance from the bank
over 25 years and our approach to providing franchise finance has remained consistent. We look at how you, the franchisor, can help your franchisees obtain the finance they need from their bank. There are a number of areas where franchisors can help prepare their franchisees for that first meeting with their bank: • Ensure they produce a concise plan that sets out a clear strategy for their business. • Their business plan should include well- thought-out financial projections, including a cashflow forecast, profit and loss account, and
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SBC continue to provide finance to good quality franchisees, assisting in the launch and growth of their businesses. We have supported franchising for
balance sheet (ideally for between one and three years). This is a key area where you can give your franchisees an advantage over conventional start-ups by assisting them with the figures, based on the existing performance of your existing franchisees. The franchisee, however, must own and understand these figures to present a credible case to the bank manager. Sometimes our commercial managers tell us that they have been presented with figures that a potential franchisee cannot explain. • Include a marketing plan detailing how they will target their potential customers and the unique selling point of the product / service offering. Again, you will be able to assist them with this. • The plan should address any risks facing the business and detail what action needs to be taken to either prevent or minimise their impact.
• Encourage your franchisees to practise their presentation before meeting with the bank to ensure they deliver a professional ‘pitch’. Your franchisees are in a stronger position than a stand-alone start-up due to the help and support of their franchisor and other franchisees in the network. Requests for funding are more likely to be agreed if they present a professional and credible business plan.
Additional help and assistance on writing a business plan, including a template for franchisees to use, can be found at
www.knowledge.hsbc.co.uk/plan. n
Author’s note
Cathryn Hayes is head of franchising at hsBC
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