March 6, 2013
With Mike Rozman, Co-President and Chief Strategy Officer
Bob Coleman: We’re with Mike Rozman, Co-President, Boefly; Mike out of Needham, Massachusetts. We’ve been reading a lot about small business financing; the numbers are down. How does that translate to the franchise financing world?
Mike Rozman: Sure, and thanks for having me on Bob, it’s great to see you. One of the things that we do closely in partnership with the IFA is track activity in franchise lending, and we’re actually seeing it up year over year. Our most recent numbers are it’s up just a hair over 5%.
Bob: Let me interrupt you. 2008 was the peak of all small business financing; how’s that compare to 2008 versus today?
Mike: Yeah, so we’re still down from the historical highs for sure, but we are carving our way back. So we’re not looking the number, I’m looking year over year. So January of 2013 compared to January of 2012, we’re up just a hair over 5%. Now it’s still off from those other highs, but we’re going in the right direction. It’s a slow slide back, Bob, but it’s something that to me shows that we are going in the right direction; and I think from a policy standpoint regulators and leaders need to be mindful of the policies they set.
Bob: Are you seeing lenders becoming more comfortable in their franchise financing world?
Mike: I think they are. We’re seeing it, I think, from some of the historical franchise lenders; they’re coming back into it in a larger way. Also some of the community banks; I think increasingly community banks are identifying franchise lending as something to be taken seriously and for them to invest time in to. It’s one of the things that we think is compelling about what we’re trying to do. We match up a business owner with a wide array of lenders; it’s what we do at Boefly. And the opportunity for a small franchisee to get in front of a wide array of lenders, not just go to the usual suspects.
Bob: Well, that’s sure a nice segue – getting in front of lenders. Tell us about your event in Boston on April 3rd.
Mike: So the idea is that we heard from a number of our franchise brands – we work with about 125 brands that rely on Boefly’s support of their franchisees – and we heard from them that they wanted to really tell their own story, educate bankers why their brands are relevant and why their franchisees are good lending candidates. So we’re bringing together 3 brands – these are all national brands. I’ll tick them off, if you don’t mind, really quickly, Bob.
Bob: I want you to focus on my audience tends to be small business lenders so tick them off on why should they get on a plane and go to Boston.
Mike: Yeah, so the brands are Kiddie Academy, Martinizing Dry Cleaning, Cups Frozen Yogurt, Checkers, Uno’s, Hardee’s, Great Clips . . . and these are all brands many of which you know well, you go to when you visit and you enjoy their products. But from a banker’s perspective, you’re always challenged with how do I originate new loans, and how can I find deal flow, and how can I find deal flow that is risk adjusted. What I mean by that is if you get comfortable with a Kiddie Academy you put your 1 to 2 million dollars to work, either 7(a) or even traditional 504 lending, you want to get comfortable with the brand. And so the idea of the conference is these executives from the brands come out and tell their story to a room full of bankers.
Bob: Sounds like a great event. Mike Rozman, Co-President Boefly; Needham, Massachusetts. Mike, thanks for joining us.
Mike: Thanks for having me Bob.
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