Wednesday, 9 August 2017
Whether you are opening a new location of a restaurant chain, or managing an existing franchise, you likely face financial challenges that are unique to franchisees.
Fortunately, commercial banking services can offer franchisees a number of solutions to help them manage financials more efficiently, resulting in a healthier bottom line.
Positive cash flow is critical to the success of any business and commercial banking affords franchisees opportunities to streamline using a variety of digital tools.
Making sure your employees get paid is a necessary part of running a franchise. Managing food service payroll or payroll for any other type of franchise business can be arduous to say the least when it involves writing out multiple paychecks each week. Payroll through automation can greatly reduce administrative stressors for a franchisee.
For example, paying employees through ACH direct deposit can reduce both the time and cost involved in managing payroll for food service industry franchises. According to the Electronic Payments Association, making the switch to direct deposit can save businesses between $2.87 and $3.15 per paper check. When paired with employee banking services, direct deposit can make it much easier for your employees to track their finances.
If you have employees that lack a regular checking or savings account, payroll cards such as BBVA Compass PaySource allow them to enjoy the benefits of direct deposit. They can access their funds without having to pay expensive check cashing fees, which could improve job satisfaction. Between the financial savings and the potential for increased productivity as a result of having happier workers, payroll automation may be a win-win for franchisees.
A steady supply of working capital is essential for managing day-to-day operations within your franchise. Having sufficient capital is also important when your plans include expanding your business.
Franchisees can also turn to commercial banks when they have a larger financing need such as purchasing equipment, remodeling stores, paying for construction costs to open a new location, or making an acquisition
Term loans and development lines of credit, for example, can provide your franchise with anywhere from $10,000 up to several millions of dollars, with repayment terms ranging from one to 10 years. The availability of capital that commercial banks offer is an advantage when your focus lies on broadening the scope of your franchise operations.
Every franchisee has different banking needs and it's important to be aware of which commercial banking services and products best fit where you are in your business's life cycle. Whether you're a first-time franchisee or an experienced franchise veteran, it may be worthwhile to explore the services offered by your bank.
The content provided is for informational purposes only. Neither BBVA Compass, nor any of its affiliates, is providing legal, tax, or investment advice. You should consult your legal, tax, or financial advisor about your personal situation. Opinions expressed are those of the author(s) and do not necessarily represent the opinions of BBVA Compass or any of its affiliates. All accounts and credit are subject to approval, including credit approval. BBVA Compass is a trade name of Compass Bank, a member of the BBVA Group. Compass Bank is a Member FDIC.
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