Franchisees need good cash flow management to keep their business going strong.

Many franchises don’t have the clout or size of bigger businesses who can benefit from scale when it comes to collecting and managing customer’s one-off joining fees, recurring fees, invoice payments from a set or a variable amount, payment plans and debt collection.  

While gyms, childcare centres and business to business operations come to mind as the business models most likely to need solutions to this issue, even retailers who operate a lay-by system need to consider how to best process the payments says Rob Baird, sales director of Ezidebit.

“Retailers like the customer to come into the store to pay but this can be done online or by direct debit. If you want to put convenience in front of the customer, this is a great opportunity.”

Big business often offers four payment channels for customers: BPay, credit card and direct debit, phone payments and web payments. This level of service can be accessed by franchisees too, using a merchant aggregator.

“It can be managed through the online portal, or integrated into the franchise software,” Baird explains. 

Good payment processes can be built into a system that is well-managed and compliant, allowing the franchise network to benefit from the advantages shared by much larger players.

MANAGING COMPLIANCE

“Compliance is important for a small business, you have to store credit card or bank details, and there are issues over data storage. If you are operating under a well-known franchise brand there is a reputational risk of credit card fraud that can be a concern.”

On top of the issue of not having to worry about compliance, franchisees who use a managed financial system can get their money when it’s due, Baird adds.

“About 96 percent of payments are made on time, every time with the direct debit system. The franchisee doesn’t have to administer this 96 percent and it frees them up to engage with the customer and grow their business.”

Ezidebit is a private company which acts as a merchant aggregator under the sponsorship of Westpac, and handles clients such as Jetts Fitness and Snap Fitness.