Franchise Credit Score-FUND
FUND, the franchise credit score, uses a proprietary scoring model to evaluate 13 credit risk categories of a franchise brand and is based on public information. The FUND™ score, with its accompanying report, is the best predictor of the future performance of a franchise system that publicly available information can provide.
- Based on up to 10 years of performance history
- Reports are only available for brands with enough size and longevity to test the algorithm
- Specifically designed for lenders
Now includes a “special circumstances addendum” which accounts for:
- How the brand was impacted by COVID
- How the brand reacted to COVID
- Industry level analysis on the impact caused by the pandemic
FUND REPORTS provide an efficient way to help assess a bank’s franchise portfolio as a separate asset class based on the franchise brand creditworthiness.
Lenders with over a trillion dollars of assets rely on the FUND Score to assess credit risks
WHAT IS A FUND™ SCORE?
The FUND™ Score is a single cumulative score that offers lenders the ability to measure risk across franchise brands using a common scoring model. The model consists of a possible 950 points associated with 13 risk and performance categories that influence unit level
performance. A weighted balance of historical and current performance is measured with scores given based on the range of outcomes across hundreds of brands.
WHY IS THE FUND™ REPORT THE BEST WAY TO ASSESS FRANCHISED UNIT SUCCESS FROM A CREDIT RISK PERSPECTIVE?
FRANdata has worked with lenders on franchise credit risk issues for over 20 years. A FUND™ report is the culmination of this interaction. It uses lender-defined credit risk categories with associated methodologies and algorithms to analyze franchise systems. Franchise systems have a unique set of characteristics from a credit risk perspective. Regardless of the industry, each franchise brand is designed around uniformity and conformity and every franchisor has responsibility for the same support functions. Based on hundreds of brands across decades of performance, credit risk factors were evaluated at the unit level, the system level, and the franchisor support level. The result is the best credit risk predictor of future brand, system, and unit performance, thus providing the lender with the tools to evaluate systemic franchise credit risk.
FUND reports may be found on the Franchise Registry. Feel free to call us if you have any questions.