The Industry / Market Potential

This is one business opportunity you owe it to yourself to investigate and one that's taking the franchise industry by storm for all of the following reasons! 

To understand the market forces that have shaped this industry and the corresponding opportunity, we have only to look at the sweeping changes that have taken place in the financial services industry as a whole, and the banking industry in particular.

Over the last ten years there has been a nationwide consolidation of banks that has resulted in the closing of thousands of branch locations. The net effect of this pervasive change is the loss of financial services to a whole sector of the American population, in particular, the middle and lower income customer. What was once a standard fact of life for the American consumer, his relationship with a local branch bank (with whom he had, in some cases, a life-long connection) now no longer exists. In addition, as has been widely documented over the last decade or two, personal debt ratios have risen to an all-time high. Traditional banks, driven by a different agenda and not focused on the middle and lower income customer with little disposable income, have abandoned this sector of the market. This has left millions of customers across the country without a regular financial service provider to meet their basic needs.

Year after year, statistics from the banking industry have documented the burgeoning “unbanked” population in the U.S. Approximately 20-30% of Americans today do not have a relationship with a traditional bank, credit union, or savings institution. As much as 50% of this group is “unbanked” by choice. This is a stunning statistic that highlights a huge and growing segment of the population whose needs are underserved.

This demand has spawned a dynamic alternative financial services industry, in particular, check cashing and payday loan companies. Industry studies now estimate as many as 13,000 check cashing and payday loan companies are operating in the U.S. cashing approximately $180 million checks annually with an aggregate face value of more than $55 billion. Consumer demand continues to be strong because the focus of these centers is to provide services that meet the needs of the “unbanked” or “underbanked” customer in a way that fits their particular lifestyle.

 
The Opportunity
 
 The real opportunity for FAMILY FINANCIAL CENTERS resides in the fact that, despite consumer demand, the alternative financial services industry continues to be a fragmented and, for the most part, unsophisticated industry with no dominant players.

In fact, if you took all of the national and regional chains and combined them, they would still comprise only 15-20% of the market. In other words, the field is predominantly made up of small independent operators who have little knowledge or interest in the fundamentals of branding, marketing, technology and customer service. An analogous situation historically is the video store industry.

In its earlier years, the industry was comprised primarily of “mom and pop” operators. Then Blockbuster Video came along with branding and marketing and point of sale systems, etc., and began operating on a completely different level. They offered their customers choices made possible by organization and systems, as well as ambience, convenience and service unlike anything they’d seen before. The customers voted with their feet, and Blockbuster’s market share grew accordingly. A similar opportunity now exists in the alternative financial services industry for a professional branded player who can bring the same kind of sophistication and execution in all aspects of the business. For FAMILY FINANCIAL CENTERS, this means looking and acting like the neighborhood bank of old, while employing the technology and systems of today to meet the modern customer’s needs. Branding, technology, convenience, and good old-fashioned customer service and relationship building in the community will create the grassroots loyalty and word of mouth advertising that will establish the FFC brand in a market eager for something better.

Another important factor that bodes favorably for the professional branded player is the move by the industry as a whole to a more mature and more sophisticated approach to the business. This trend is being driven by a number of forces. The first is the increasing regulation of both the check cashing and payday loan industries by the state banking authorities. This has been the case for some time in the check cashing industry, which for the most part, is a stable and regulated industry.

Many of the states currently have mandated maximums on fees, and this forces all providers to compete at the same or similar price levels. This, by definition, helps the superior player who is offering more value for the same price. The states also have specific licensing requirements and periodic audits. With the advent of the Patriot Act, all financial institutions are under more intense scrutiny and the reporting and record-keeping requirements have increased.

This is good news for the professional provider because his technology and operating systems will allow him to comfortably remain in compliance, while the poorer operators struggle to meet or keep up with escalating standards. Some of these smaller providers have already decided that this is not the game they want to be in and are selling their centers and getting out.

This, in turn, provides additional acquisition and growth opportunities. Another trend that is helping to drive the full-service branded player to the forefront is the closing of the gap between the traditional check cashing customer and the payday loan customer. There is a demographic shift taking place in which more and more of the middle income market is using alternative financial service centers, particularly check cashers, and as this demographic skews higher and higher, the gap between this customer and the payday loan customer, who normally has a banking relationship, is closing. The modern “Blockbuster” of financial service centers will be able to meet the needs of both market segments and also offer an array of other complimentary financial products and services, thereby becoming a “one-stop” financial center for the middle-market consumer

The Franchise
 
 FAMILY FINANCIAL CENTERS (FFC) FRANCHISE was developed to address the market opportunity created by the loss of neighborhood branch banks and the sub-standard response by current alternative financial service providers. FAMILY FINANCIAL CENTERS, unlike the traditional check cashing and payday loan companies, are not located in the “war zones” and poorer parts of town. FFC is positioned in the first and second tier suburbs where the middle-income customer has firmly established himself and is looking for a provider that can give him the ambience and professional service of a local bank, but in a manner that meets his specific needs.

FFC stores are located in attractive suburban strip centers that are convenient to the customer’s home or work. The store presentation is a bank-like setting with the latest computer systems and transactional software that allow for quick and efficient service, and security systems that are state of the art but don’t sacrifice customer contact and owner comfort. The franchise marketing programs promote a full menu of financial products to the communities they are serving.

Because most of the industry is not aware of or committed to the fundamentals of branding, marketing, and automated systems, FFC franchisees can exploit these areas as its competitive advantage to attract and build market share with a consumer base that is eager for a quality service provider.

Additionally, FFC will be very active in developing new products and services that its franchisees can then market to their existing customer base, further cementing that relationship and differentiating the FFC brand from the rest of the pack. Finally, and perhaps most importantly, franchisees have an experienced corporate management team with a support staff that can properly set up their stores and provide the training they need to launch their businesses, and work with them on an ongoing basis to successfully build those businesses.

WE DO IT ALL!
Market Evaluation
Site Selection
Lease Negotiation
Turnkey "Store in a Box"
Project Management
Licensing
Classroom and in-store Training
Ongoing Support

If you’re looking for a “single source” solution for researching, developing and opening your store, FFC is the place for you. We will lead you through the maze of starting a business from initial discussion to store opening and support you thereafter. We’re there each step of the way.