Check cashing franchise opportunity
The real opportunity for the Family Financial Centers check cashing franchise resides in the fact that, despite consumer demand, the alternative financial services industry is a fragmented. The industry is not overly sophisticated. The money services industry is predominantly made up of just a few groups of providers:
With the first group, think of the hardware store industry. The days of the neighborhood Mom and Pop hardware stores are gone. They’ve been replaced by professionally branded players like Home Depot and Lowe’s that have the systems and tools to operate on a completely different level. These big players offer their customers choices made possible by organization and systems, as well as ambience, convenience and service unlike anything that came before. The customers voted with their feet, and the market for branded players grew accordingly.
A similar opportunity exists in the alternative financial services industry for a professional branded player that can bring the same kind of sophistication and execution to the money services business. That player is Family Financial Centers. A FFC check cashing franchise looks and acts like your local neighborhood bank, uses today’s technology and systems to meet modern customers’ needs at does it conveniently in the community. This gives our franchisees a competitive advantage over both the small Mom & Pop stores as well as the large corporate managed stores.
Another important factor that bodes favorably for a professionally branded player like Family Financial Centers is the industry as a whole requires a more mature and sophisticated approach to the business. State banking authorities are increasing regulations for the check cashing and payday loan industries. Many states currently have mandated maximums on fees, and this forces all providers to compete at the same or similar price levels. So, the winner in the marketplace must offer 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 reporting and record-keeping requirements have increased. This is good news for Family Financial Centers because our technology and operating systems allow us to comfortably remain in compliance, while 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, provides additional acquisition and growth opportunities.
Another trend helping to drive full-service branded players like Family Financial Centers to the forefront of the money services industry is the increasing number of Americans living paycheck-to-paycheck. This is causing more middle-income customers to use community-based alternative financial service centers.
According to the MSBA, the Money Services Business Association, access to bank accounts expanded in 2017, but there are still quite sizeable gaps in banking and credit services among minorities and those with low incomes. Consider, nearly 95 percent of all adults have a bank or credit union account, according to MSBA’s May 2018 “Report on the Economic Well-Being of U.S. Households in 2017.” But that number varies by ethnicity and race.
The report states that one in 10 blacks and Hispanics do not have a bank account, and another 3 in 10 have an account but regularly use alternative financial services, such as money orders and check cashing services.
In 2017, some 5 percent of adults were unbanked or underbanked. Essentially, 13 million people don’t have a checking, savings, or money market account – the “unbanked.” Half of the unbanked used some form of alternative financial service in 2017, like a check cashing service or a money order. Further, that same report states that 18 percent of adults are “underbanked.” Meaning, they have a bank account, but they still use an alternative financial service product.
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