Is Not Being Accredited Slowing Your Franchise Growth?

Is Not Being Accredited Slowing Your Franchise Growth?

For many years now access to finance has been a consistent issue impacting upon the growth of franchise networks. Recruitment of quality, new franchisees can be a long and difficult process, and loosing a prospect in the final stages because they were unable to secure finance is a major disadvantage for any franchise brand.

Accreditation programs are an important piece in any franchisors toolkit. They take into consideration the strength and success of a franchise brand as a whole, in order to offer guaranteed finance for new and existing franchise partners in the group. This is turn makes gaining access to funds quicker and easier, fueling growth and expansion within the network.

Some franchisors hold the perception that establishing an accreditation will only benefit new prospects entering the network, however this is not the case. Accreditation programs help existing franchisees take advantage of any opportunities that come their way. Established access to funds allows business owners to take out loans for refurbishments, new equipment and even the purchase of a second location. A franchise brand can achieve long-term success by encouraging the growth of franchisees already in the network, not just by obtaining new recruits.

The ability to easily access external funding for major business expenses such as a site refurbishment or equipment upgrades allows franchisees to invest their capital into business growth activities such as local area marketing, which actively generate more profit for the business and fuel the success of the network as a whole.

Despite the time commitment required to become an accredited brand, it seems like a logical step for any franchisors looking to set their network up for success. However, recent changes to the banking climate in Australia has made securing an accreditation through banks and traditional lenders all the more difficult. A lack of flexibility and tightening of already strict lending standards has left those in the franchise industry looking elsewhere for their finance.

While all the big banks all offer some form of franchise accreditation program, incoming franchise partners are still struggling to pull together enough funds to cover their initial investment. Many banks are moving away from what they perceive to be ‘risky’ investments, franchise businesses included. In addition to this, traditional lenders often won’t fund the full value of the franchise, leaving franchisees to invest their savings to bridge the gap. This results in the business holding little to no working capital for operations and sitting in a precarious financial position.

It is clear that whilst banking accreditation was once the cornerstone of a well thought out franchise finance plan, the lending landscape has changed. However, it is important to note that accreditation programs aren’t only available with the big banks. Seeking accreditation with an alternative lender can offer a franchise network a wider range of finance options to fit the varied needs of the franchise partners within it.

As lending conditions become tougher for Australian business owners, it is vital that franchisors take steps to actively overcome the growth barrier that is access to finance. Establishing an accreditation with one or more lenders ensures that no opportunities for growth or expansion will be lost due to inability to get funding.

Health & Wellness In The Franchise Industry

Over the years the franchise industry has seen a number of trends come and go, but one that has been on a steady growth path from its beginning is health and wellness. Business Franchise Australia states that ‘Over the next two decades, no market is likely to see better growth in Australia than preventative health and wellness services.” To no surprise the franchise industry is reflecting this, with 24/7 gyms and health-centric eateries popping up on every corner.

Influential sources ranging from social media to the Government are stressing the importance of maintaining a healthy lifestyle, and in response business owners are adapting in order to accommodate this ever-growing consumer demand. It’s no secret that businesses who are able adopt the healthy living mantra will see great success and potential for growth in coming years, and the good news is, it’s easy to get on board.

With a wealth of new and fresh, alongside trusted and established brands, there is every opportunity for entrepreneurs to expand into the health and wellness market. Through the Cashflow It Franchise Accreditation System, accredited franchise partners have access to pre-approved funding so that they can get their franchise up and running without delay.

Experiencing great success in the health and wellness market is Cashflow It’s accredited franchise, Coco Bliss. With a simple mantra of – eat pure, nutritious and raw whole-foods, Coco Bliss embodies everything consumers love about healthy and mindful eating, and is looking for franchisees to help bring their offerings to even more consumers.

Through Cashflow It’s Franchise Accreditation System, Coco Bliss’s existing and aspiring franchisees are able to access finance to fund equipment and site fit-out through a simple application process that reduces the challenges of securing funds.

Accreditation is a powerful tool to assist in the growth of franchise networks, simplifying the process for both franchisors and franchisees. As Australia’s experts in Franchise Equipment Finance, Cashflow It offers pre-approved finance for a wide range of accredited brands.

As specialists in the franchise financing industry, Cashflow It aims to make the process as simple, fast and transparent as possible with an easy online application, quick service and easy to understand contract.