11 April 2019

An appetite for growth: HSBC’s expertise supports BLCO Enterprise's Ambitious Plans

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From its initial roots as a real estate development company in the 1970s, BLCO has evolved into a successful franchise operator. The company now owns and operates 24 KFC and Taco Bell restaurants across British Columbia and Alberta, employs more than 700 team members and is in the process of renovating its current franchise stores while building and acquiring additional restaurants. Tailored solutions from HSBC are supporting BLCO as it embarks on its next stage of growth within Canada and across the border.

Financing business growth

BLCO diverges from most larger franchise operations because it owns about 80 percent of the locations in which its stores operate. That makes it important to have a finance partner able to meet the company’s more complex requirements for real estate and franchise financing.

“Through our mergers and acquisitions banker, we entertained four proposals with varying terms and allowances; HSBC outshone the others,” says company founder Don Lloyd. “Another factor was Tom de Larzac, HSBC’s head of franchise banking. We’d worked with Tom previously and when he signed on with HSBC, we reached out to him. Tom knows our business really well.”

As of 2018, BLCO completed a re-finance of its operations and real estate with HSBC. Through another of its divisions, HSBC was able to help the BLCO team with multiple environmental assessments on some of its property holdings, something most franchise operators and lenders would never have to contend with. With plans to expand in Montana, BLCO needed a finance partner south of the border, and HSBC was able to make the necessary introductions to its US franchise team.

“HSBC seems to have a similar appetite for growth on both sides of the border,” says Lloyd.

New leadership, new ambitions

While studying business and as a young professional, Don Lloyd’s daughter Rachel Lloyd took on a series of successful project roles within BLCO. Don has now stepped back to focus more on the real estate aspects of the company, and Rachel has taken the helm.

Her aim is to reach 200 stores over the next five years, adding to the KFC line but also expanding to include franchises with an added focus on the healthiest foods for everyday eating. Her expansive vision required a responsive financing partner as well as new cash flow systems that could support a more extensive and rapidly expanding organization.

With 30 years of international franchise chain expertise and services, HSBC was well positioned to help. Streamlined, efficient decision making and a credit facility without standby fees or interest costs until funding mean that the Lloyds can respond to opportunities with confidence.

In addition, “HSBC provides a full suite of services,” says Rachel. “They do all of our cash management and electronic bill payment. We’ve instituted cloud-based accounting, which makes it much more accessible not only to our people but to our auditors and the bank. HSBC facilitated that change, better and less expensively than other banks.”

Mapping the path to greater success

“We are expanding to make ourselves a bigger, more efficient entity,” says Don. “Efficiency comes from using the above-store organization and infrastructure to manage more stores. Anytime you add a store, it costs incrementally less to manage.

“I’ve said this to every manager we have: we have the physical assets, and we have the well-known, international brands and products – the only other element is people. So that’s where our emphasis is, and where I think our strength is. With the best people putting in their best efforts, we’ll be successful.”

Along with BLCO’s recapitalization and financial relationship with HSBC, the uniquely effective team they’ve put together means that the company is set for aggressive growth, says Rachel. “We’re ready for new opportunities.”


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