MoneySave Solutions: The franchise opportunity

Startups talks to franchise director of MoneySave Solutions Graham Dennis about the franchise’s success across the UK

Franchise: MoneySave Solutions
Company: Pentagon (UK) Ltd
Description: Owned by Pentagon (UK) Ltd, MoneySave Solutions offers debt solutions and a range of money saving services to financially impaired customers.
Started in: 1996
Founders: Richard Bramham
No. of franchises: 50
Coverage: Across the UK
Cost per franchise: £22,500 plus VAT
Website: www.moneysavesolutions.com/franchising/

In the current economic climate, it’s easy to sit back and complain about the banking system, but when Richard Bramham was confronted with the frustrating task of dealing with banks during the recession of the early 90s, he decided to stop complaining and start acting. Richard, at the time of the recession, was running a small hotel in Bedfordshire which had had its fair share of financial struggles. During these difficult years Richard discovered that when dealing with the financial challenges of running a small business there was very little help or advice available. The experience of dealing with these challenges caused Richardto become very disillusioned with banks, credit card companies and financial experts and he consequently started Pentagon (UK) Ltd in a small office in Biggleswade.

Pentagon (UK) Ltd began trading as EuroDebt Financial Services offering financial help to those that needed it and Richard took on advisers, who visited clients at home and offered financial support and advice. The company grew rapidly and within 18 months Richard had to find new office space to house 20-plus office administrators and 16 advisers.

Encouraged by the company’s initial success, Richard soon began to look for new ways to expand and eventually built the Euro Debt Financial Services franchise in 2001, beginning with four franchisees. In 2011 this was rebranded as MoneySave Solutions, which now boasts more than 50 franchises and over 20 services, including a unique bank account that can be opened without credit checks.

Joining Pentagon (UK) Ltd in 2000, Graham Dennis was appointed as head of recruiting and franchise training and eventually franchise director in 2005. He tells Startups about the lucrative MoneySave Solutions franchise opportunity.

So how did Pentagon UK move into franchising?

In 2001 we were looking for ways to expand, we were considering various options and finally decided that franchising with a tried and tested business model was the best way to proceed. We attended a seminar run by the BFA, met up with franchise solicitor John Chambers and launched EuroDebt as a franchise.

Where did you open your first franchises?

We started with four franchises in Chelmsford, Dartford, Wakefield and Bridlington.

How successful were those original franchisees?

Extremely! They still operate today.

Why did you decide to rebrand as MoneySave Solutions?

The EuroDebt name did us proud but as the market changed we needed a more recognisable, usable and user-friendly name. It was a marketing strategy which enabled us to introduce more services and products to our existing clients and a way of introducing our company to the wider marketplace.

The franchise opportunity

We offer our unique services to the general public to help them deal with unmanageable debt situations. We also provide insurance products and bank accounts, so that people who are in difficult financial situations have a company that specialises in helping them.

What makes the franchise unique?

We offer our unique services to the general public to help them deal with unmanageable debt situations. We also provide insurance products and bank accounts, so that people who are in difficult financial situations have a company that specialises in helping them.

What services do you offer?

Primarily, we offer debt solutions including individual voluntary arrangements. We also offer products such as life insurance, equity release, bank accounts, buildings and contents insurance, motor insurance – all for people with credit impairment.

How big is the market opportunity?

The financial marketplace is huge. In the UK we currently owe £1.4 trillion, of which £200bn is personal finance, such as loans and credit cards. We’re managing £1.2bn worth of debt at the moment.

How many franchisees does Pentagon (UK) have today?

We have around 50 active franchise owners and probably around 15 retired franchise owners who are still receiving monthly residual income from us from their existing client bank.

How is MoneySave Solutions marketed?

Primarily through our direct mail marketing campaigns where potential clients have expressed an interest in our services through a survey questionnaire or have been issued with formal debt recovery proceedings through the court.

How do you divide the regions?

It’s quite complicated. From our previous experience and client bank we have identified potential clients who are the most likely to suffer unmanageable financial situations by occupation, area and family profile. Each territory has 60,000 households that fit the criteria we have stipulated, but the territory could have a total of as many as 200,000 households, with 140,000 not meeting our criteria. However, these households can still benefit from our insurance products, there is no one area that is more profitable than anywhere else.

The perfect franchisee

What does MoneySave Solutions look for in potential franchisees?

There are no qualification requirements, as training to become financial debt advisers and life insurance qualified advisors is included as part of the franchise fee. The challenge with finding the right franchisee is finding someone who is personable and able to communicate with clients and also understands their problems. We are operating in a highly regulated industry, so they also need to be able to understand and follow procedures.

So do franchisees work from an office, or are they home-based? Is it part-time or full-time?

Franchisees can be home-based or office-based, as they are required to make home visits to clients. We would prefer full-time workers, but we will allow potential franchisees the flexibility to start-up on a part-time basis  with the intention they will operate the business full-time within a reasonable time-scale.

How are franchisees vetted?

Each franchisee has to have their own individual consumer credit licence, so financial vetting is carried out by that application process.

What do you offer franchisees who sign up?

They are trained to become financial debt advisors. They also train to become life insurance qualified advisers. We supply them with the hardware (such as laptops, printers, scanners etc) and  also the marketing material to promote their services locally.

How much do they pay and what are the ongoing franchise fees?

£22,500 plus VAT. The monthly management fee commencing after the first six months is £100 or 3% of turnover, whichever is greater.

How do franchisees finance the purchase – what arrangements does the brand have in place with banks?

NatWest currently finances our model. Each new franchise comes with a client bank attached of around 100 clients producing approximately £700 per month.

Success and growth

How successful are some of the franchisees today?

Many are achieving the six-figure salary mark.

How is the MoneySave solutions looking to grow?

We plan to expand our brand and take on approximately another 40 franchise owners throughout the UK within the next 12-18 months, thus enabling us to cope with the expected demand within the market.

What is the potential of the business in the future?

We plan to expand and provide our services to a wider audience. At the moment we deal with people in financial difficulties but we can still provide services to everybody across the UK, such as cheaper insurance and a unique bank account that can be opened without credit checks.

What will the challenges be in achieving that?

Delivering financial services to the public is all about having the right balance of products and services. We believe at MoneySave we have this balance right however we are continually adapting to changes hence our launch of two new services, PPI Reclaims and Motor Finance.

To what extent is the founder involved today?

Richard is still a hands-on managing director.

Finally, is the company a British Franchise Association (BFA) member?

The company has been an associate member since 2005. We are also members of the Debt Managers Standard Association (DEMSA), which is fully approved by the Office of Fair Trading.  So this means consumers can approach us with confidence and we are authorised to display the Office of Fair Trading official logo.

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