Location, management the keys

ONE of the State’s major lenders believes a combination of location and management is the secret to the success of any franchise venture.

Challenge Bank franchise finance and industry support manager Steve Seddon said the bank preferred to develop a “history” with its customers before any finance was approved, but always looked at location and each operator’s suitability when it comes to franchise lending.

“Some franchisors are entrepreneurial to the point of prejudicing site or franchisee selection,” Mr Seddon said.

“But Mr Han’s got it right. It comes down to relationships and communication between the

bank and the customer.” (See story this page)

A member of the Franchise Council, Challenge Bank views each franchise proposal independently against the two main criteria, with no particular view on the likely success or failure of particular industries.

“Franchising in general is a growth industry in WA,” Mr Seddon said. “However, domestic help franchises seem particularly popular and appear to be enjoying relative success.”

BankWest spokesman Peter Knight said the bank had no particular administrative or policy structure for franchise lending, but looked at each proposal as it would any business venture.

“We look at the intrinsic value and worth of the franchise, the goodwill of the franchisor company and the history of that business,” he said.

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