Commercial banking for franchises
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.
Simplified cash flow management
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.
- Merchant services can provide payment processing solutions including point-of-sale systems, online payments, and digital gift cards. Other services include inventory management software, fraud protection, and loyalty rewards programs for your customers.
- Remote cash deposit enables businesses to deposit cash electronically that can later be picked up by armored car. For instance, BBVA offers a DeposiCash service that provides business clients with an on-site smart safe that is linked to a bank's networks and keeps track of how much money has been deposited. This eliminates on-site cash counting while reducing the potential for theft, allowing you more time to focus on the immediate needs of your franchise.
- Online banking services allow you to see at a glance balance information for your various franchise checking and savings accounts; transfer funds between those accounts; review transaction history; schedule electronic bill payments; and originate ACH transactions or wire transfers both during and after normal banking hours. Again, this convenience can save you valuable time while making it less difficult to monitor your cash flow.
Automated payroll services
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 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.
Access to capital
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.
Explore your options carefully
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 USA, nor any of its affiliates, is providing legal, tax, or investment advice. You should consult your legal, tax, or financial consultant about your personal situation. Opinions expressed are those of the author(s) and do not necessarily represent the opinions of BBVA USA or any of its affiliates. All accounts and credit are subject to approval, including credit approval. BBVA and BBVA Compass are trade names of BBVA USA, a member of the BBVA Group. BBVA USA is a Member FDIC.
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