decades. Invoice discounting was probably the pioneer
in terms of a franchised approach, followed by factoring.
Both of these areas are now well established and offer
domestic and international networks for their clients
The benefits of a franchise umbrella are substantial
for the franchisor, the franchisee and the clients they
serve. The client benefits by receiving local service
under a franchise arrangement. In a non-franchised
situation, service could come from a centralized head
office location that may be thousands of miles away
from the client. Having the opportunity to deal with
their financial source on a local basis adds considerable
value to the relationship.
Skin in the Game
Many people assume that factoring or invoice franchising is an extension of a branch network system,
resembling a branch of a national bank in the neighborhood. On the contrary, in a franchise model, the
franchisee is a principal in the business and not
a representative or agent of the head office. As a
principal, the franchisee invariably has a financial
involvement in each transaction — far different from a
For individuals with a strong desire to grow and run
their own business, opportunities under the franchise
umbrella are substantial. One other difference in a franchise arrangement from a “branch” relationship is franchisees are required to make a financial commitment
and, as with all franchise operations, will need suitable
financing to engage in the business.
If you asked people on the street to name a fran- chise, you would probably get the same response from almost everyone — a certain fast food outlet
known for its golden arches.
But the days of franchising being relegated to fast
food and automotive repair shops are long gone. There
is a veritable plethora of opportunities for would-be
entrepreneurs. Franchising has expanded to include
services similarly to the way that it did when fast food
dominated the marketplace.
For the purpose of this article, franchising is
defined as a written-down system that covers the
operations of a specific business in such a way that the
business can be replicated in different locations. There
are thousands of franchise options in North America
today, and many of these organizations have a long
and stellar history.
The financial services industry has played a significant part in franchise industry growth over the past few
Just Like McDonald’s:
Factoring Franchises Offer Benefits to Entrepeneurs
BY DAVID BANFIELD
Franchising offers financial service entrepreneurs the same benefits that food outlets, hotels and car
repair shops currently enjoy. For an upfront investment, the franchisee receives support from the franchisor,
association with a trusted brand and expanded business opportunities. David Banfield explains how factors
and invoice discounters now use franchises, rather than branches, to provide clients with a local presence.
The benefits of a franchise umbrella are substantial for the franchisor, the
franchisee and the clients they serve. The client benefits by receiving local
service under a franchise arrangement. In a non-franchised situation, service
could come from a centralized head office location that may be thousands of
miles away from the client. Having the opportunity to deal with their financial
source on a local basis adds considerable value to the relationship.
Interface Financial Group