Franchise Financing - Finding the Money
The cost of buying a franchise can be substantial, but you don't have to be a trust fund baby to get into the franchise of your dreams. Where is the funding going to come from? That's the number one question franchise buyers ask. There are numerous sources of capital, but start with these basic steps first.
- Talk to the franchisor. About one in three franchisors provide franchise
financing directly or have arrangements with third party lenders. You will
find any financing arrangements spelled out in Item 10 of the FDD (Franchise
Disclosure Document). Even if the franchisor doesn't have money to offer, it
is still the best source of information about your financing options.
- Look within. It is a common misconception that you can or should borrow
all the money to open a franchise. Be prepared to come up with at least 25 to
30 percent of the total start-up costs. To assess personal resources, start by
preparing a personal financial statement (you'll need one to present to
- Ask family and friends. This is one of the most common ways to finance a
franchise. After all, who knows your dreams and capabilities better? Plus,
they want to help you succeed.
- Call your accountant. Ask your accountant to recommend a banker. A good
accountant - one with small business experience - is usually a great source of
- Find a specialist. You should start at the bank where you do your personal
banking, but there's a good chance you won't get what you need there. Local
banks are often unable to fund franchise projects. Your chances will be much
better with independent lenders like GE Capital Franchise Finance that
specialize in franchise lending.
- Search the SBA Franchise Registry
(www.franchiseregistry.com). The SBA's
small business lending guarantee program is a key source of loans. This
program for new franchise buyers is much easier to access since the creation
of the Franchise Registry, a central database of information about franchisors
that have been certified by the SBA.
5 Hot Food Franchises for This Summer
People are always asking us what food franchises they should open. And with summer right around the corner, right now might be the best time for you to open your very own food franchise. Every franchisee is different, so these recommendations might not be the perfect fit for you, but without further ado here is my list of the five hottest food franchises for the summer of 2015.
Low Cost Franchising - Options for Affordable Franchising
Fortunately, there are numerous excellent low-cost franchise options available, and those options span nearly every industry an entrepreneur could imagine.
Running a Franchise from Home - Is it Right for You?
The U.S. Labor Department's Bureau of Labor Statistics recently conducted a survey of home-based businesses and estimated that there are just over four million self-employed, home-based workers. (The number of franchised businesses in this total was not calculated.) However, the National Association of Home-Based Businesses, in Owings Mills, MD, puts the number at closer to 50 million people. Whatever the accurate number is, it is a number that everyone agrees will only continue to rise.