Amid the economic upheavals Americans experienced in 2020, many are turning to franchising as a way to own their own business, generate sustainable income, and follow the path of proven success. With the restaurant industry comprising such a large portion of the total franchise segment globally, we are sure to see restaurant franchise growth in the coming months. This is of course reflected in the fact that brands in the restaurant industry are already rebounding through continuous innovation, particularly in the fast-service and fast-casual segments, which are uniquely equipped to meet changing consumer needs and on-the-fly service.
Restaurant franchisors are preparing for this inevitable growth in 2021 while fostering the existing franchise partnerships that they have tapped into their network so far. However, franchisees’ access to capital and credit for new businesses will impose an additional barrier to the desired growth. With that in mind, I will explore solutions for franchisors to drive growth through streamlined operations and induced strategic loans for their franchisees.
In this COVID-19 environment, it has become more competitive for an entrepreneur to have access to a loan as lenders are more risk averse as many deal with their damaged loan portfolios. In addition, this entrepreneur must take into account several adaptations and innovations. Especially in the restaurant industry, the way we dine will change from here on out. Digital, mobile and driving access will remain important for consumers. Integrating omnichannel access into a restaurant prototype can add additional costs that a franchisee did not have need to consider in the past. For example, a drive-thru demand will create a more competitive landscape for desired lots or even create higher construction costs. While ultimately beneficial, it may require more capital up front to adjust to these developments, capital that is competitive to obtain. Restaurant brands need to analyze the factors in their own business that have changed, the implications of that change for franchisees, and how the franchisor can intervene to ease this transition for applicants.
Access to the loan
There are several ways that a franchisor can take to increase a franchisee’s access to loans and capital. Initiatives such as providing working capital to franchisees in dire straits or providing credit enhancements to lenders when needed can make all the difference in sustained growth and sustained operations. Third-party technology platforms often consolidate financing solutions and provide access to a whole new world of finance that had not yet been explored. From experience, my company, BoeFly, a marketplace for franchise growth solutions, connects borrowers to a wide range of specialist banks and finance companies, providing a strong set of tools and resources franchisees need to be successful. By exploring outsourcing avenues, business owners are connected to a set of lenders across the network that they would typically not have access to, including banks or smaller lenders in an entirely different region of the country.
Streamlining the process
Capital is not only more difficult to obtain for many franchisees, but it can also impose a difficult process on both the franchisee and the franchisor. Accordingly, according to the Harvard business review, many brands are not only turning to back office outsourcing solutions to streamline operations, but can also reduce business expenses by up to 30%. Brands invested in growth solutions are realizing it and making the most of what they have by doing more with less to save time, money and resources for maximum expansion. For example, before the pandemic, BoeFly created the bVerify tool that streamlines the candidate selection process into an easily digestible report for the brand’s sales team. With access to verified information, the sales team can avoid what has long been an administrative burden on them. Moreover, in a survey conducted by the Economist, workers who see their employers as “pioneers” in technology themselves score 16% higher for productivity than those who say their employer is bad at using mobile technology. A transparent, data-driven process not only increases productivity and reduces expenses, but also enables brands to make smarter decisions, accelerate the time between signing and opening, organizing growth and optimize operations using existing information that ultimately attracts a potential franchisee to the onboarding process.
Mike Rozman is the CEO and co-founder of, BoeFly, a leading market for franchise growth solutions. Since 2010, BoeFly has connected businesses with the resources they need to succeed, using data-driven systems and a robust online marketplace. BoeFly’s full range of innovative services and technologies are able to connect borrowers to a wide range of specialist banks and finance companies, while pioneering products, such as bVerify, serve businesses at all stages of development. . For more information visit www.boefly.com.