Until sitting down to speak with Jack Wilson, chief development officer of the Family Financial Centers franchise, I knew the “money” business was big, but not in excess of $100 billion. (yes, that with a “B”). Wilson has been in the financial services industry for many years, and after learning more about the potential in serving the under and unbanked population in the US, he got on board with Family Financial Centers (FFC). FFC offers a full menu of financial services to their customers, which are typically middle-income working families. Their services include check cashing, money orders, wire transfer, electronic bill payment, pre-paid debit cards, gift card buyback programs, gold and precious metals purchasing, and a host of other financial related products. All with the look and feel of a neighborhood branch bank.
To better understand why owning a piece of the financial services industry is something you should be seriously considering, just look at the numbers. Wilson shared with me that while there are 13,000 financial services businesses across the US, they are supporting 30 million customers with 350 million transactions, resulting in $106 billion annually. In other words—there’s plenty to go around. A subset of that population is the un/under-banked. There are 17 million unbanked, and 51 million underbanked people living in the US. Family Financial recognized that the unbanked and underbanked were not only underserved, but the services provided needed to be enhanced and the standards raised. That means no predatory lending practices. Currently, FFC has 50 locations in 13 states. In 2017, FFC cashed approximately $330M in checks and conducted over 1 million transactions. 2018 estimates are even more impressive, with $450M in checks and over 1.5 million transactions.
But why a franchise? This is a question I get frequently as it relates to an array of industries. However, when it comes to financial services, this question becomes much more critical. Financial services and the banking industry are very challenging to get into, due to the number of state and federal regulations. To provide certain banking services, you must be a U.S. citizen, no history of bankruptcy, and you must have a Money Banking Services (MBS) account. Qualifying for and securing an MBS account is exactly what FFC are experts in. They are one of only two firms franchising in the MSB industry. Doing this on your own as an independent is virtually impossible. Lastly, if you were successful in getting up and running and unknowingly skipped any steps (not knowing what you don’t know), a government inspector or auditor could come in and shut your business down immediately. FFC provides complete back-end support—including frequent reviews and audits, daily, monthly, quarterly, and annually.
FFC has three primary models, each of which satisfies an array of investor profiles. Acquisition, Store-in-store, and Tellerless Check Cashing kiosks. Acquisitions are for the investor interested in owning a community-based financial service center, potentially expanding with multiple locations, and who wants a business that already has existing cash flow and has access to capital in the $350K–$450K range. Store-in-store is for investors that currently have a store location and want to provide additional service to their customers. Tellerless Check Cashing kiosks are the newest offering from FFC, which allows customers to cash a payroll check without having to interact with a live teller and can be placed in a variety of high traffic locations. Tellerless Check Cashing kiosks give a newer investor an opportunity to get into the financial services industry, passively, with about $50K.
Wilson would like to see many more African Americans enter into the financial services business and hopes to facilitate that in his role at FFC. If the high revenue potential isn’t enough of a draw, being an FFC owner enables investors to provide much-needed services in a professional setting to our communities, as well as jobs. And ultimately, with its high rate of return, it’s the type of business that enables parents to build a family legacy for generations to come. A legacy goes beyond a mere inheritance. A legacy is something that continues to build and grow, year after year. Not only providing wealth but empowerment. Wilson’s biggest piece of advice? “If your gonna build a family legacy, do it in the $106B money service industry.”