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How flexible payment options and smart digital tools can transform your franchise business

Spenda
13 August - 5 min read

How flexible payments and smart digital tools can transform your franchise business

Running a franchise network requires alignment of brand, products and services, and systems and processes. One of the most effective ways to manage your franchise network is by using  digital software that will not only provide you with the resources you need to effectively run your operations internally from head office, but also help franchisees, some of whom may have not owned a business before, with the structure they need to better manage their stores and stay on top of cash flow.


Consider the volume of B2B transactions in your franchise network

As a franchisor, you likely need to collect a lot of different payments every day. Whether it’s initial franchise fees (training, system support and marketing materials), fit-out fees, ongoing franchise fees or ancillary costs for franchisee’s leases, accounting for all of these transactions can be time consuming for you and all of the franchise owners in your network. Further, if you use manual processes to reconcile your accounts and complete your financial reporting, you may have experienced data-entry errors which can drive inefficiencies across the business. 

How better franchise management software can help boost your cash flow 

Like any business, franchises may experience their quiet and busy periods. Throughout these times cash flow may decrease and tighten, which can impact the ability of your franchisee’s to meet their payment obligations. If a franchisee is unable to pay their invoices on time, this will eventually affect your cash flow too.

Late payments have a flow-on effect across the economy with many businesses paying their invoices, on average, 11.2 days late. If you already have 30 day payments terms, late can significantly restrict your cash flow and impact your ability to pay their invoices on time. And as late payments are the number one cause of business failure, it emphasises the importance for businesses to get the right systems in place to reduce late payments altogether. For franchise head offices, offering franchisees a range of payment options can help them stay on top of their cash flow, while ensuring you get paid on time.

Let’s take a look at an example for a franchise network:

A franchise network without Spenda

Jumping Bean is a franchise network of cafes across Australia. With 12 locations across the country, each store features a similar fit out, signature beverages and light snacks and meals.

Since Jumping Bean moved to a franchise model a few years ago, they have brought some great franchise owners into their network. However, as more locations open and the company looks to expand with further franchise locations, the business’s head office has not only noticed that late payments have increased but the administrative burden is growing as the business grows too. Many franchisees are finding it difficult to meet their upfront costs and the process of reconciling all of the transactions between head office and the franchise network is tedious and open to human error. The Jumping Bean needs more efficient systems and processes and payment options which will help everyone keep on top of their cash flow.

A franchise network using Spenda

The Jumping Bean decided to introduce Spenda’s integrated payment platform at its head office. The platform has not only made the business’s accounting and financial reporting more streamlined, but it’s reduced manual data-entry errors and created more efficiencies across the board. Further, with more payment options, allowing franchisees to schedule large payments over smaller installments, Jumping Bean's head office has improved their cash flow.

Allowing businesses to pay by credit card also means that the head office gets paid faster while franchisees get an extra 30 days to pay their bills through their credit card provider’s statement periods. For example, a franchisee may pay an invoice that has 30-day terms, and their credit card bill is due in a further 30 days. This effectively provides franchisees with credit terms of 60 days. The business’s head office is also considering setting up payment incentives such as frequent flyer programs and discounts for early payments to encourage prompt payment times.

Franchisees now always know when their next payment is due and that they have it covered, while Jumping Bean's head office has reduced the amount of time they spend chasing late payments. Further, cash flow has improved in head office as the business knows when it can expect payments and plan their spending accordingly. Now that the business has improved its payment processing and reporting, Jumping Bean is considering implementing Spenda’s point of sale system and inventory management solution across its network to help franchisees better manage their day-to-day.

A franchise network without Spenda

Jumping Bean is a franchise network of cafes across Australia. With 12 locations across the country, each store features a similar fit out, signature beverages and light snacks and meals.

Since Jumping Bean moved to a franchise model a few years ago, they have brought some great franchise owners into their network. However, as more locations open and the company looks to expand with further franchise locations, the business’s head office has not only noticed that late payments have increased but the administrative burden is growing as the business grows too. Many franchisees are finding it difficult to meet their upfront costs and the process of reconciling all of the transactions between head office and the franchise network is tedious and open to human error. The Jumping Bean needs more efficient systems and processes and payment options which will help everyone keep on top of their cash flow.

A franchise network using Spenda

The Jumping Bean decided to introduce Spenda’s integrated payment platform at its head office. The platform has not only made the business’s accounting and financial reporting more streamlined, but it’s reduced manual data-entry errors and created more efficiencies across the board. Further, with more payment options, allowing franchisees to schedule large payments over smaller installments, Jumping Bean's head office has improved their cash flow.

Allowing businesses to pay by credit card also means that the head office gets paid faster while franchisees get an extra 30 days to pay their bills through their credit card provider’s statement periods. For example, a franchisee may pay an invoice that has 30-day terms, and their credit card bill is due in a further 30 days. This effectively provides franchisees with credit terms of 60 days. The business’s head office is also considering setting up payment incentives such as frequent flyer programs and discounts for early payments to encourage prompt payment times.

Franchisees now always know when their next payment is due and that they have it covered, while Jumping Bean's head office has reduced the amount of time they spend chasing late payments. Further, cash flow has improved in head office as the business knows when it can expect payments and plan their spending accordingly. Now that the business has improved its payment processing and reporting, Jumping Bean is considering implementing Spenda’s point of sale system and inventory management solution across its network to help franchisees better manage their day-to-day.

Provide payment options to your franchisees

One of the most powerful things you can do for franchisees is provide them the systems and processes to improve the way in which they operate and run their stores, and enhance their supplier communications, all while helping to better manage their cash flow — because, after all, if they grow, your business grows too. 

Here are a few benefits of how implementing a smart digital payment platform, such as Spenda, in your franchise head office can help accelerate growth across the business. 

  • Get paid on time, every time which means using the functionality and convenience of B2C payments in the B2B landscape. Think credit card payment options, bank transfers and Buy Now, Pay Later arrangements (like Afterpay but for B2B payments).
  • Better bill presentment so your franchisees can view and pay for all of their invoices easily. Franchisees can select what they’ll pay and when and both parties have a clear view of what money is going in and out of their business every month.
  • Automation of reconciliation by integrating Spenda with your accounting and financial systems, you’ll enjoy fast reconciliation and full debtor access, giving you all the tools you need to strengthen not only your cash flow, but your franchisee’s cash flow too.
  • Improved procurement processes with Spenda’s inventory and purchase management software, which makes it easy for business owners to order exactly what they need from their suppliers at exactly the right time. Automated order reminders based on preset minimum and maximum levels will ensure you never run out of stock again, while eliminating problems such as ageing stock.
  • Flexible payments with your suppliers because your franchise network will not only enjoy the ability to easily order from multiple suppliers from the one digital location, but will also benefit from the flexibility of a range of payment options, including pre-agreed instalments and access to third party finance.


Wondering how to provide more payment options in your business?

If you’re looking to provide more payment options in your business, but you’re not sure where to start, download our whitepaper HERE and learn how to use smart digital tools and integrated payments that help boost cash flow across the entire supply chain.

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