For immediate release
Contact:Alisa Harrison, 202-628-8000
aharrison@franchise.org
www.twitter.com/franchising411
WASHINGTON, June 14, 2010—International Franchise Association Chairman Ken Walker, CFE, chairman and CEO of Driven Brands, announced the formation of a board level Credit Access Working Group to develop tools and best practices to support the efforts of IFA members and prospective franchisees to access capital.
“IFA has been very active in Washington, D.C. on legislative and regulatory changes to increase the access to credit,” Walker said. “To complement those efforts, the working group will develop a plan of action to create educational sessions and information to help make the case to lenders and others at the grassroots level about the ability of franchise businesses to contribute significantly to local economies.”
An IFA study conducted by FRANdata estimates that banks are expected to lend $6.7 billion to franchises in 2010 versus the $10.1 billion that would meet 100 percent of demand. The shortfall can be attributed to banks’ conservative approach to a weak economic outlook and uncertainty in the commercial real estate market. At 100 percent lending, franchise businesses could create or maintain 305,000 jobs and $32 billion of annual economic output in 2010. The $3.4 billion shortfall in lending would result in 134,000 total jobs not created or maintained and $13.9 billion of lost annual economic output.
Walker said that franchise lending has changed because of the recession. “The preferred lender model that has been the norm in the past is no longer the reality,” he said. “More local and regional lenders will provide the majority of the loans and we need to help franchisors and franchisees with the tools to demonstrate the strength of franchising to lenders who may not be as familiar with the model.”
The new working group will be co-chaired by IFA board members Bill Hall, CFE, CEO of William G. Hall & Co., Forth Worth, Tex., and Scott Pressley, CFE, managing partner of Van Ness Capital Advisors, Atlanta, Ga. Other members include IFA board members Harry Loyle, chairman of ComForcare Senior Services, Dayton, Ohio, Darrell Johnson, CFE, President & CEO of FRANdata Corporation, Arlington, Va., Shelly Sun, CFE, CEO & co founder of BrightStar Franchising, LLC, Gurnee, Il, and Lane Fisher, CFE, partner, FisherZucker, Philadelphia, Pa.
The working group will begin immediately to develop templates and guidance on what information lenders are now requesting as they consider loan applications. The group will also identify ways that franchisors can help improve the process and how IFA can collaborate with banking associations and organizations to extend the knowledge. Best practices will be made available to IFA members via webinars, Franchising World, and seminars and meetings around the country, including the annual IFA convention scheduled for Feb. 13-16 in Las Vegas.
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About the International Franchise Association
The International Franchise Association is the world’s oldest and largest organization representing franchising worldwide. Celebrating 50 years of excellence, education and advocacy, IFA protects, enhances and promotes franchising through government relations, public relations and educational programs. Through its awareness campaign highlighting the theme, Franchising: Building Local Businesses, One Opportunity at a Time, IFA promotes the 21 million jobs and $2.3 trillion of economic activity generated by franchising. IFA members include franchise companies in over 90 different business format categories, individual franchisees and companies that support the industry in marketing, law and business development
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