For potential franchisees with insufficient funds, dreams of business ownership can be shattered at the first hurdle. They may have the required skills for a business model that seems made for them, and be full of the desire for success, but if the right finances aren't in place, a potential business partnership is likely to end before it has begun.
Mars-branded franchise, Snack-in-the-Box, which was acquired in a corporate buyout by Snack Time PLC last year, has developed a creative solution to this problem of under-funding. By offering qualified candidates the option of interest-free deferred payments, it hopes to secure more high calibre franchisees, even those who fall short on some of the initial investment required.
“There is nothing more frustrating than finding good people, who then cannot move forward to become franchise owners because they struggle to raise enough funds,” says Snack-in-the-Box Sales Director, Matthew O'Neil. “We've looked at a number of ways to reduce our franchise start-up costs without cutting back on the crucial support that each new franchisee needs. Ultimately, we can't reduce the price of the franchise package without compromising a franchisees' success. But what we can do is offer flexible terms. Subject to qualification, we are now able to arrange deferred payments for high calibre candidates who need a little extra financial help at the outset.”
Adds O'Neil: “Deferred, interest-free payments are an attractive proposition, but this deal isn't just for anybody. We have strict criteria in our franchisee selection, so this is not about rapidly growing a business at any cost. The circumstances must be right for both Snack-in-the-Box and the new franchisee.
“We are only interested in bringing people into business who have the right financial profile as well a positive attitude, and ability to succeed. If we feel they will make a success of their business, then we will help them. We wouldn't do that if we didn't believe in them, or in our business.”
Snack-in-the-Box offers two separate franchise opportunities.
The SELF SERVICE BOX franchise delivers snacks and confectionery to businesses of up to 20 employees. At £23,975 + vat, the SELF SERVICE BOX franchise can only be operated successfully as a full-time business and its package is the simplest to break down. Pre-qualified franchisees can buy into the business for less than £10,000 + vat, paying for the remainder of the start up costs in interest free weekly deferred payments over their first two years.
The COMPACT VENDING franchise places slimline vending machines into businesses of over 20 employees. The franchise is now also available as a part-time business opportunity with fewer machines, or as a full-time multi-van business. Snack-in-the-Box are able to create a package that suits the aspirations, earnings potential and pocket of each franchise owner. The start-up costs, deferred payment schedule and return on investment are heavily dependent on the number of machines sited.
“There is a trade off with this deal,” admits O'Neil. “For franchisees' who qualify for deferred payments and who choose this route, they will see a reduction in their earnings potential in the first and second year of up to 50% of what they can expect to make if they had funded the business in full. Of course, if franchisees need to earn more from day one, then a bank loan over a longer period or personal investment is the only other way they'll achieve it.”