Own a Check Cashing Business - Automated Kiosks?

Passive Investors can now run their own Check Cashing Business with an automated kiosk at a much lower investment than a retail check cashing outlet. How much can you make and how much does it cost? today on Franchise City.

We uploaded a video a while back that covered the many challenges of owning a traditional retail check cashing business. Link at the end of the video but in a nutshell the main issues are increasing financial regulations making it almost impossible to get licensed, problems with banks "derisking" and charging usurious rates if they take you as a client at all, Fraud, which can be a very costly problem, and a very high initial investment if you open a retail store. Many check cashing business owners over the past decade have chosen to sell their business and exit the industry entirely.

Despite these issues, there is still a strong demand for check cashing. According to a recent Federal reserve report 22% of all Americans are either unbanked or underbanked, and use alternative financial services. Check cashing has increased 3.3% since 2017 and check cashing transactions reached 58 billion dollars.

So there is a demand, but historically the industry has been problematic to enter. A solution that eliminates the problems typically related to the check cashing industry is a check cashing kiosk. These machines allow owners to benefit from the check cashing demand, but eliminate many of the issues inherent in the industry. One of our associates here at Franchise City has owned a group of these machines for several years and has been happy so figured we would roll it out to the channel.

So problem #1 with the check cashing industry. Licensing and regulation. As an independent you need to apply for all the licensing involved, in certain states this can take up to a year, and cost 10's of thousands and involve potentially million dollar surety bonds. There are Anti Money Laundering protocols, SAR's, or suspicious activity reporting, then you need to pay for employees, opening a store, its complicated and costly. With the check cashing machines, all compliance is taken care of by head office. You providing cash to buy the machine, the company takes care of everything else.

Problem #2 is fraud. As an independent check cashing business you have to cover all the fraudulent checks and with such slim margins a few bad checks can eat away your profits. With these kiosks, the company takes the hit on any fraudulent checks. The company has been in the business since the 90's and their automated system has become very good at detecting fraudulent checks, so you, the owner, do not need to worry about these costs.

Problem #3 is location. If you open a retail store in a bad location you are usually tied into a long lease so it is costly to move. With the kiosks, the company places the machine for you, and they have many national accounts in place, and if a location proves to not be lucrative, or stops being lucrative they just move it.

The company guarantees the investor a minimum monthly revenue of about $1,000 per kiosk regardless of actual performance, for the span of the contract. The Kiosks are also eligible for the Sec. 179 tax deduction, which can result in a significant tax break on the purchase of the machines. You can view the activity of your machines anywhere in the world, and you do not need to live near the machines, they can be placed anywhere in the USA as the company manages them for you.

The minimum investment is 3 machines at $105k.

REQUEST MORE INFO ON OWNING CHECK CASHING MACHINES: https://www.franchise.city/franchise-inquiry

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