Hi Paul,
Thanks for replying to my message. I was
looking over your Green
Sheet Web site and a few
additional questions came to mind.
First let me tell you that my firm has a
client that is looking to purchase a franchiser. This franchiser
has approximately 50 franchisees in the check guarantee business.
We are attempting to assist our client in negotiating an
offer.
I read your article entitled "United
States Check Growth Study" where it was mentioned that the
potential to manage check risk has not yet been realized.
My question is: Has there been any
research done that specifically addresses the outlook for
companies in the check guarantee business? If so, can you point me
in the right direction?
Do you know of any franchisers in the
business of granting check guarantee franchises? If so, have any
of these franchisers been sold recently?
What do you think are the main drivers of
value for the type of business that my client wishes to buy? Does
the fact that he wants to buy a franchise business as opposed to a
stand-alone check guarantee business impact the assessment of
value?
Sincerely,
Tony Centanni, CPA
Tony:
Based on what you have told me so far,
I would say that your client must be interested in purchasing
either TeleCheck or Check Care Systems. I respond this way because
these are the only two "Check Guarantee" organizations that have
franchised.
It is true that some organizations
like CheckRite have franchised, and that some people in the
industry have confused their "Verification" and "Collection"
business with "Guarantee," but I do not believe that they have
franchised for many years. To my knowledge, only Check Care is
still franchising at this time.
Finally, yes, there is a difference in
the price in franchise organizations. Since you give up control as
well as marketplace to a franchisee, it becomes difficult to
expand in verification markets or handle national accounts, as
just two examples.
Good Selling!SM
Paul H. Green
Editor-in-Chief