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There are more than 80 value elements a franchisee may experience from membership in a banking syndicate.
According to the recent International Franchise Association's Profile of Franchising study, about 20 percent of franchise organizations offer financial assistance programs to their franchisees. All of these programs are centered on financing, either debt or leasing programs. While this support is crucial, especially in capital-intensive operations, it generates the question: Who is helping system franchisees with their banking and investment?
A new franchisee will usually select his banking relationship on proximity, credit relationship or family relationship. Some are undoubtedly drawn to the lure of free banking and free checking offers from banks seeking to add new small-business accounts.
One large bank has even adopted a "Wal-Mart" approach. There are greeters by the front door and a separate teller line is reserved for small businesses. Community banks have always emphasized personal service, especially since they don't have the capacity to offer the full range of products and services available at a large commercial bank.
Is this personal touch all that franchisees should expect from their banking institution or can they find opportunities by studying how other services are purchased?
In New York Times columnist Thomas Friedman's book, The World is Flat, he identifies how UPS has "leveled the playing field" of shipping. Mike Eskew, the UPS chairman and CEO, says, "You know who the majority of our customers and partners are? Small businesses ..." Those guys in the brown trucks are giving those small businesses the same services available to their large corporate clients. In fact, by assisting them with their global supply chain, they have helped many smaller firms go international. How do your franchisees' banks compare to UPS?
The insurance industry has developed multiple collective structures that allow firms and professionals the opportunity to leverage their collective purchasing power. Group captives, risk retention groups, purchasing groups, and "rent-a-captives" are different collective structures that are considered part of the alternative insurance market.
Collective banking can be defined as managing the collective bank transaction volume of a number of organizations as if they were members of a single organization.
For purposes of this article, refer to that single organization as a banking syndicate and the treasury professional who...