IFG started operations 42 years ago in a small town in Connecticut, USA and after about a year of operations in the United States, IFG relocated to Canada in the greater Toronto area. They operated there for about twenty years before they grew into a franchise organization.
The Interface Financial Group had, over the first two decades of their life, serviced a very specific marketplace with a very specific financial service. IFG grew up as an invoice discounter assisting businesses in accelerating their cash flow. In itself there is nothing unusual in that service.
It has been accepted and widely used in major financial centres for many, many years.
The IFG twist to the service was their unique approach to the market and their simplistic approach to how they worked with their clients. In its traditional form invoice discounting usually takes the entirebook of receivables that a company has, and they are pledged to the discounter in return for a revolving line of credit against those invoices. It is an ongoing arrangement whereby the client, the user of the service, contracts with the discounter to discount all of their receivables for a period of a year or more.
The service that has developed in the major money markets of the world has also evolved into a ‘highend’ service inasmuch as traditional invoice discounters will not look at business below a fairly high threshold.
Interface founder, Mr. John Sheehy saw the opportunity to break into a market that was almost totally un-serviced with a similar service offering. He brought invoice discounting to the small business world. He did away with the concept of having to have a certain level of business to qualify and, equallyimportant, he did away with the need for a contract pledging 100% of a clients’ business over a long time frame.
What he created for small business users was a ‘use-it-as-you-need-it’ service. He offered his clients an opportunity to accelerate their cash flow, and hence their growth, by turning a single invoice or a batch of invoices into instant cash, with basically no restrictions.
If we fast forward some 40+ years, we find that Interface is still doing the same thing in the same small business marketplace. With recent changes in the approach applied by most banks, the small business sector continues to be the hardest hit when it comes to finding a credit facility from their bank.
While Interface is still providing an ‘in-demand’ service to their small and medium-sized clients that are in an expanding mode, some things have changed. The most radical has been the delivery method employed by Interface. IFG started with their roots firmly in a one-office environment. While they were able to market their service on a national basis, it was evident that their local market invariably produced the greatest volume of business with the best quality.
No one likes to see marketing efforts not being adequately fulfilled, and to some extent that was starting to happen at IFG. The solution was to create a delivery method that would service more than just one location. Franchising was the chosen expansion option as it gave IFG the opportunity to grow in a rapid but controlled environment. Having decided that the IFG system would ‘franchise’, John Sheehy and his team went about the task of crafting an invoice discounting franchise – the first of its kind in any financial market area.
As the franchise became established, it proved that having the ability to handle business on a local basis and face to face with the clients was a tremendous asset, not only from a control point of view for IFG but also from a relationship point of view from the client. Small business owners like to meet the individual that is helping their business grow, and they like it even better when IFG actually meets them at their place of business.
Turning Interface into a franchise operation also proved to be the turning point for their growth. Since franchising in a local Canadian territory, Interface has seen exponential growth in many directions. A natural evolution for Interface was to move in the much larger United States market. While not the largest market in the world, the US market is very geographically challenging. Franchising proved to be a good fit because it helped to overcome many of the geographical challenges a more conventional company structure would encounter.
Franchising also proved a very robust model for Interface as it grew a strong footing in the US with a very substantial market size. Interface next expanded beyond their North American boarders with an operation in New Zealand where the population base is only approximately four million people, and the economy is vastly different from the North American size that IFG had become accustomed to.
Once again, with the recruitment of a local Master Licensee a network of Interface offices was quickly established to the point where franchisees in Canada, The United States and New Zealand were all enjoying a solid business opportunity with their franchise, and an opportunity that generated a very acceptable return on their working capital. All of this while assisting in the growth of their small business clients, and naturally the growth of the local economy. focus “With recent changes in the approach applied by most banks, the small business sector continues to be the hardest hit when it comes to finding a credit facility from their bank.”
More expansion has followed over the years with operations in Australia, Singapore, Mexico, Ireland, The U.K., and South Africa being the most recent addition to the network. In all areas IFG services the same market and operates in a consistent format through a license and franchise type format.
Over the years Interface has grown from being the only provider of this service to the small business market, to being the market leader. Certainly others have seen the merits of the business, and a very limited amount of competition has evolved. What has not been replicated over the years is the unique distribution method pioneered by Interface through a well established franchise or licensed system.
That approach remains as one of the key elements not only for the success of IFG, but also for the success that licensees and franchisees enjoy.
With a solid foundation, Intºerface plans a substantial increase in business in 2015 and the coming years. With a service that brings considerable benefit to the user, Interface is well poised to meet the demand created by ongoing growth.
The franchise model is now very robust for franchisees with a unique leverage situation to limit risk and enhance returns for franchisees.
With over 40 years of history and experience and an International network already established, Interface is well positioned to grow again.