When considering which bank to approach to assist in investing in a franchise, it is important for prospective franchisees to consider the services and support the bank will provide as well as the cost element, argues Royal Bank of Scotland National Franchise Manager Alan Smart
The decision to go in to business for yourself is one of the biggest you are likely to make. Even with the added comfort of buying a proven franchise, the prospects may appear daunting as nearly 65 per cent* of people buying a franchise come from the comfort of salaried employment.
Naturally you will look for all the support you can get to ensure you have the greatest chance of success, most likely engaging an expert solicitor and accountant as well as working closely with your chosen franchisor.
Recent statistics show that 40 per cent* of people investing in a franchise need to borrow money, mostly by way of a bank loan from one of the high street banks. So how do you choose the right bank for you? The first consideration will be to choose a bank experienced in providing franchise finance, normally an Affiliate Member of the British Franchise Association (BFA) with a franchise division.
While a number of banks have a franchise unit, their approaches and types of support can vary significantly. It is essential therefore when choosing a banking partner that you fully understand the support you can expect, scrutinising the bank just as closely as you did when choosing your franchisor.
The Royal Bank of Scotland (RBS) has had a franchise team for over 21 years. However, following customer consultation and feedback the team's operating model was changed dramatically in 2002 to fully meet customers' needs and demands.
The RBS Franchise Team now consists of seven Regional Managers based throughout the UK giving local expertise (an area of increasing importance according to the most recent BFA Survey). These managers deal exclusively in supporting those already in franchises as well as those considering franchising, providing local support at grass roots where it's needed most.
Last year saw the RBS Franchise Team help more people reach their franchise goals than ever before, which is reflected in the most recent BFA survey showing a steady year-on-year growth of customers choosing RBS to support them with their businesses. All indications are that this trend is set to continue this year.
Interestingly, the statistics show that the most important aspect when considering a bank is the quality of service provided, with 28 per cent* of those surveyed by the BFA giving that response. While cost will always be a dynamic, customers are increasingly looking more and more for value for money and it's evident that customers are prepared to pay for a first class, right-first-time service.
Increasingly providers are offering longer periods of 'free banking' - in some cases permanently. On the face of it this seems very appealing, however there is little point having a free service if that service doesn't satisfy your full needs, now and in the future. In the long term making the wrong choice at the outset can prove costly.
RBS experts look at every customer as an individual, tailoring the support to fit their individual needs with innovative and exciting solutions such as the Flexi Business Loan and Offset Mortgage.
These two products were created from feedback from our customers, and are capable of providing true flexibility as well as potential cost savings.
While our products and services continue to develop and evolve, our commitment to putting the customer first remains unchanged and a key aim. So when you are considering your banking partner, ensure you have satisfied yourself that you will receive the best possible service.