by Premier Pawnbrokers
last updated 29/09/2021
by Premier Pawnbrokers
last updated 29/09/2021
Premier Pawnbrokers franchisees offer discreet financial services for professional people
Forget everything you think you know about pawnbroking. According to reports from the UK, it’s one of the fast-growing sectors in the financial market. Pawnbrokers are emerging as the high-street lender of choice for the asset-rich middle classes.
And it’s not just in the UK, either. Kevin Garner, who founded Premier Pawnbrokers in Wellington almost a decade ago, says, ‘A lot of people, business owners and professional people, face short-term cash flow issues. They’re not struggling, they have plenty of assets, but they want to hold on to them. We provide a discreet service that enables them to raise the cash they need without ringing alarm bells.
‘We will advance cash (pledge) against all sorts of assets: classic cars, vintage wine, paintings by Goldie – even a helicopter. That’s in addition to commonly pledged items such as gold and jewellery, among other things.
‘Think of it this way: if you were to get a $1,000 overdraft, use a credit card or get a payday loan, then you find you can’t afford to repay it, you’re just another $1,000 in debt – not to mention owing interest, default interest and even fees. But if you pledge an item with us and can’t afford to redeem it, we will sell it on your behalf and return the surplus to you – meaning no further debt is incurred.’
Now, with three branches already established, Kevin is launching Premier Pawnbrokers as a franchise opportunity.
The rise and rise of alternative finance
Kevin had a background in the finance industry with AMP before founding his own mortgage broking franchise in the early 2000s. After the banks stopped supporting brokers, he looked for other opportunities and came across high-end pawnbroking. After researching both the UK and US markets, he realised that there was nothing similar in New Zealand.
‘The market was dominated by low-end pawnbrokers,’ he points out. ‘The type of clients we attract wouldn’t go to those places for a short-term cash advance to see them through the school fees, the final stages of a property development, or an inconveniently-timed tax bill, so we created a discreet office-based business with a substantial online presence. The advantage of pawnbroking is that there are no credit checks, no application forms and no awkward questions, so people don’t risk rejection or reducing their credit score.’
He also notes that reality television has made people realise that pawnbroking is a very accessible solution to cashflow problems. ‘We’ve already had enquiries about doing a TV show here in NZ, although plans are on hold during Covid.’
Tried and tested
Premier Pawnbrokers franchisees will have access to a tried and tested system developed over ten years and proven in three locations: the original Lower Hutt office, plus satellites in Wellington and Christchurch. Full training is provided, and a specially-designed software program provides full control, including pricing guides. The package also includes specialist testing equipment.
Franchisees enjoy three different revenue streams, with more on the way:
Pawnbroking. Pledges are secured against assets, and a redemption fee is charged upon collection.
Sale of goods. Unredeemed items are sold, mostly via specialist auction sites or Premier Pawnbrokers’ own website. Jewellery is particularly popular.
Gold and jewellery buying. People are often pleased to realise the value of old jewellery they haven’t worn for years. Because Premier deals directly with bullion dealers, they can offer a good price and still make a healthy profit.
‘Having a range of revenue streams means that the business can do very well for franchisees, whatever else is happening. Even with all the pressures of Covid, we did very well last year,’ says Kevin.
‘The important thing in business is not what your turnover is, but how much profit you make in relation to the amount of risk you take. This is a low overhead business: no expensive premises, few staff, and a well-supported back end that helps you maximise the return on your investment. I think you’ll be surprised at just how lucrative pawnbroking can be.
‘As a guide, we would expect you to invest around $100,000 for start-up costs. This would cover the initial franchise fee, training and all the equipment and systems you need to run your business. In addition, you will need working capital from $150,000. This is a positive cashflow business, but you will need initial funds to finance the money you pledge out and the items which you purchase to sell for profit.
Kevin says that all franchisees need is a head for business and an ability to work out the numbers. ‘You have no experience in pawnbroking? Guess what, neither did I,’ he laughs. ‘But we’ve been doing this for a long time now, made some mistakes and developed the systems so that you won’t do the same. We will train and coach you in every aspect of the business and, because every aspect is controlled by our sophisticated but easy to use software, you’ll find it simple, enjoyable and profitable to run.
‘We have opportunities all round New Zealand, and regular clients in many parts of the country, so if you’re interested, give me a call. It’s the Premier form of pawnbroking for the 21st century.’
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