Business Franchise Australia


The Interface Financial Group

The Negative Franchise with a Comfort Zone!

Is there such a thing as a negative franchise? The IFG 50/50 franchise has sometimes been referred to as a negative franchise, not because of the income that franchisees generate – which we believe is above-average and very positive – but because of a large array of components found in a normal franchise that don’t apply to The Interface Financial Group’s IFG 50/50 franchise model.

We are talking about the fact that the franchise requires no employees; no rented or leased premises; no inventory; no long hours; no extensive travel; no paperwork; no advertising; no custom equipment or signage, and – one of our favourites – no hard work, and we could go on.

While all these things may be considered by some as negative items purely because they are not a component of the franchise, for others they represent very positive attributes that they are looking for in their franchise search.

Individuals transitioning from the corporate world into self-employment and entrepreneurship usually want to travel with as little baggage as possible. They are looking for opportunities that for them are not only a solid business but a business that comes with a positive lifestyle element – often something that was missing in their corporate life. Invariably transitioning executives have ‘been there – and done that’ when it comes to the long hours and extensive travel. They have all experienced the maze of office politics and endless form filling and report writing and, most of all, they have all experienced the hard work element that they were required to contribute to creating income and profit for somebody else.

The IFG 50/50 franchise model is well-tried and tested, but at the same time is very simple. However, the franchise does represent an intangible service, which is sometimes difficult for people to grasp. Talking about a hair salon franchise, or an automotive aftermarket service or a web design business, the candidate can readily picture these opportunities based on their own experience.

The Interface Financial Group franchisees are engaged in a white-collar professional financial service known as invoice discounting. While invoice discounting has been a financing tool for the business community for many, many years, it is not particularly well-known and certainly difficult to visualise.

Put very simply, IFG franchisees work with their business clients to accelerate their cash flow, and this is achieved by buying invoices due at a future date and providing immediate cash for those invoices today. The purchase price of the invoice is naturally slightly less than the face value – the difference representing the discount or income for the franchisee in the transaction. It should be noted that franchisees do not lend money but buy specific current, quality invoices at a discount to provide exponential growth opportunities, not only for themselves but for their clients. Because the transaction is structured as a buy/sell arrangement rather than a loan, it means that the business is not regulated as a lending arrangement might be. Naturally, if there are no regulations, then there are also no reporting requirements for franchisees to concern themselves over.

Typically, franchisees are owners/operators and do not require any staff, as all transactions are done in conjunction with the franchisor – another unusual feature since the franchisor engages with the franchisee in every transaction.

This franchise is all about money, people and technology; this is where the ‘no hard work’ element comes into play. Because the franchisor is engaged with the franchisee in all transactions, it also means that the franchisor handles all the paperwork involved in the financial transaction with the client. Franchisees are engaged by using their business background and business acumen to work with the franchisor in certain due diligence aspects and financing, while the franchisor handles all of the day-to-day paperwork, administration, bookkeeping, etc.

The franchise does not require any specialised equipment, and there is certainly no inventory to buy.  Because of the unique way that franchisees market their service, there is also a ‘no sales’ element to the franchise. This no sales/low sales approach is also another very positive feature that appeals to transitioning executives who rarely see themselves as ‘salespeople ‘. The IFG marketing approach is built on a relationship marketing formula that usually results in the majority of business being handled by franchisees as being business that has been referred to them. Typically, a franchisee would not market to an end-user, but rather work with a trusted local professional lead source.

While there are many things that are not components of the franchise, one of the important positive aspects that are included is capital leverage. Every IFG 50/50 franchisee has the opportunity to leverage their capital to create income for themselves on capital that they did not deploy; this translates into working with other people’s money – OPM – and the use of other people’s money in business is an established way to create income on a rapid basis.

In his New York Times bestselling book, ‘Rich Dad Poor Dad’, Robert Kiyosaki popularised the idea of using other people’s money – OPM – to build wealth. However, that narrative is focused on obtaining other people’s capital, albeit at a modest cost to make the formula work. The big difference with IFG is that there is absolutely no cost to franchisees to use the leverage component to create an above-average return on their working capital. They get to use the additional capital for free!

The Interface Financial Group have created a well-delineated comfort zone for all franchisees. The three main elements of that comfort zone that have outstanding appeal for franchisees are:

Firstly, the fact that all transactions are completed as a syndicate of franchisee and franchisor. Both parties have ‘skin in the game’. Neither the franchisee nor the franchisor work in isolation.

Secondly, the fact that the franchisor has relieved the franchisee of the paperwork burden is an item of considerable comfort for franchisees – with the franchisor’s extensive history, it means the transactions will be documented in a timely and professional manner every time.

The third element of the comfort zone is naturally the leverage component, whereby franchisees have the unprecedented opportunity to work with the franchisor’s capital at absolutely no cost to enhance their income stream.

These three elements that create the franchisee Comfort Zone are very positive in what is sometimes considered a negative franchise.

Entrepreneurs making the quantum leap from a paycheck to self-employment need to know that when they leap, they will land on very solid ground. The IFG franchise provides that solid platform in the form of over 45 years of history – over four and a half decades of supplying the discounting invoice service to the business community. Over time, not too much has changed at Interface with regards to the actual service; however, the delivery method and the cosmetics now reflect a very substantial technology ingredient that enables us to do things in a much shorter timeframe, and certainly from a franchisee’s perspective there is no excessive paperwork and no ‘hard work’ – only ‘smart work’.

For entrepreneurs and would-be entrepreneurs looking for a franchise that has history and a proven, established system that generates secure income working in a ‘core business hours’ timeframe, IFG represents a very positive rather than negative franchise opportunity with a substantial franchisee comfort zone.