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Snooze adds vendor finance to franchise offer

Sarah Stowe

Bedding retail franchise chain Snooze has introduced vendor financing for its potential franchisees.

Alistair Browne, network development manager, told Franchising, “We have a number of franchisees who don’t have sufficient funds, they have some backing but not enough. For the right person we will assist them to get into the business.”

Browne [pictured] said the financing is intended to secure sites and franchisees when timing is an issue.

A typical situation for vendor finance would be: “if we have a site that is available now and our internal modelling shows it could be a viable business, and we could lose that site, and we have a franchisee keen to take it on.

“With due diligence it can take up to three months for bank finance to come through,” he said. “We charge some interest as well, but we make it easier for them to get in.”

Snooze will charge interest at 2 percent above bank fees but there are no establishment costs, said Browne.

Franchisee applications for finance will be analysed on a case by case situation and successful applicants will be expected to see the vendor finance as a temporary measure.

“In our contract, after 12 months we anticipate the franchisee would seek refinancing.”

Snooze is accredited with both the NAB and ANZ.

Expansion

The goal is to grow from 73 stores to 100 over the next three years.

Target markets for growth are Tasmania and the Northern Territory, with additional stores planned for regional New South Wales, metro Sydney, Western Australia and metro Brisbane.

Snooze managing director, Simon Beaty, said “With an aggressive growth strategy firmly in place and with proven results amidst some of the toughest retail conditions in history, franchise partners can be confident they’re investing in a business model that’s both profitable, and tried and tested.”