A check cashing location is a place where folks who have issues getting bank accounts commonly go to handle financial affairs. If you want to become a check cashing agent as a franchisee, plan well ahead of your intended launch and take the time to gain a full understanding of your responsibilities as an owner of this type of business.
Examine the risks associated with running a check cashing business. For instance, as the cashing agent, you commonly have to bear the loss when a check bounces. You must pursue the customer or the payee, which may involve taking legal action or hiring collection agencies. You also take on security risks by carrying so much cash in one location.
Research your target customer when you run a check cashing location and use a demographics reporting service like ZipSkinny to identify potential cities or towns where you can find these targeted customers.
Investigate the various check cashing franchising companies and find one that has location openings in your area. A number of websites provide searchable databases of franchisors. Determine the investment you have to make in the business and the credit requirements, and read the franchise disclosure statement, which contains comprehensive data about the franchising company.
Submit to a full background check in order to become a check cashing agent. In this industry you have to handle a significant amount of cash — the franchising company needs to verify that each franchisee has a history free from offenses involving money and other major offenses.
Apply for a check cashing business license from your state. Your franchising company can help you with this step. You may have to fill out an application, complete a state exam, pay licensing fees and pay for a comprehensive insurance policy to get the license.
Prepare your location to the requirements of your chosen franchising company. In many cases, the parent company has a listing of preferred contractors who can design the location to the franchisor’s exact specifications, including the front area, back office, signs and advertisements.
Establish a bad check detection system for your business and a check evaluation policy. For instance, many check cashing business owners will only cash checks for established customers and require a check cashing card with the customer’s picture in addition to government identification. You can identify risky customers by establishing an account with ChexSystems. You can also reduce check fraud by setting up biometric check cashing software, which helps you to authenticate customer identities. Again, your parent company can help you with customer and risk management.
- ICAN Communicate LLC: How to Start Your Check Cashing Business
- Startup Biz Hub: How to Start a Check Cashing Business
- FranChoice: Steps Involved in Investigating a Franchise Opportunity
- Consumer Debit: ChexSystems Consumer Assistance
- Oregon Division of Finance and Corporate Securities (DFCS): Check-Cashing Businesses - Licensing and Fee Limits