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Financing Your Franchise Business

Written by: Sebastien Page

Article Overview: So you’ve come to the conclusion that you’d rather buy into a franchise and get the benefit of a tried and true business model instead of figuring out everything yourself. Well, that makes perfect sense and you’re certainly not alone in this mode of thinking.

Financing Your Franchise Business

So you’ve come to the conclusion that you’d rather buy into a franchise and get the benefit of a tried and true business model instead of figuring out everything yourself. Well, that makes perfect sense and you’re certainly not alone in this mode of thinking. However, you have to be aware of a few things. For example, were you aware of the fact that there are over half a million franchise businesses in the United States? Simple calculations indicate that franchising represents a third of each consumer spent dollar in the United States and that amount just keeps on getting bigger.

Considering making franchising your next business move while clever, has many requirements. You need the funds to get it off the grounds for starters. However, if you had had a lot of money lying around in the first place, you probably wouldn’t have had to think about franchising. Therefore, you will have to turn to a proper financing program. As a general role, the better established the franchiser is, the more likely you’ll find a better financing program when associated with his/her franchising company.

To maintain your finances and minimize losses, you should think about avoiding some mistakes like leasing second rate equipment. Also, keep your credit cards under control.

A less expensive way by which you can obtain financing is taking out a mortgage on your home. You could also hopefully find a member of your family or a friend who is both rich and trustworthy enough to help you finance your business. Think carefully about your options before making a decision.

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Article Tags: benefit, business model, business move, conclusion, credit cards, financing program, franchise businesses, franchiser, half a million, losses, money, mortgage, perfect sense, starters, true business, united states



Related Forum Posts
Re: Enticing Franchises - Top 9 List - All Franchise listed above are in millions of dollars. Do you have the list of Franchise in thousands
Re: Info for would be franchisers... - [quote="Sebastien":1d29sdv1]Like Franchise Times, Franchise Update is a very practical magazine. There is no blah blah, just straight facts that anyone in the franchise community can relate to. I just want to mention that all these magazines are NOT franchisee oriented. I mean these magazines are for franchise professionals. If you're looking to buy a franchise, you won't find much information in there. To answer your question, getting published in Franchise Times was fairly easy. I don't want to brag too much but I think I am known in the franchise industry. I was the marketing guy at Franchise.com for a few years before joining my new company, the World Franchising Network. So people know me and I have a very good relationship with Nancy Weingartner, the Managing Editor at Franchise Times. I was talking with her at the last Franchise Expo South in Miami and she mentioned she'd like me to be profiled. I was like "ok, sure!". I like this franchise executive profile thing in Franchise Times as it is rarely BS. People are usually really natural in there.[/quote:1d29sdv1] Thanks for the follow up Sebastien! And I can't say that I'm surprised that networking with the right people and managing your relationships with them properly are the keys to being published. I guess the old adage holds true of "it's not who you know, but who knows you" that's important.
how much for a franchise fee? - Dear Colleague There is no easy answer to this question. Things to consider: [list=] The sizeof the Franchise Clent base Expected Turnover Intellectual Property costs (recoup) Number of Franchises Number of employees Original Set up costs Franchise admin costs An example: A franchise that I was involved in setting was to a simple "lawn mowing/home repair" franchise. The Franchise included national/local advertising - preparation of client lists - general admin - central accounting etc The Franchise involved 300-500 clients - and an annual turnover of about $300,000 . The annual franchise fee was $30,000. Hope that this gives you some idea Take care Ian[/list]
Fed rate cuts . . . - So just what do the newest Fed rate cuts mean to Franchise and Business Opportunity investing? Is it immediately felt? What timeframe do you think, or rather, where are we in terms of new vs. existing business investment? A similar question can be composed for the economic stimulus checks - will they a have any effect if consumers spend a little $$
re: restaurant start-up - I'm not sure about government grants for restaurants, but my recommendation would be to approach a lender that offers loans under the Canadian Small Business Financing Loan program where the government will guarantee 85% of the loan. You can borrow up to $250,000 to finance equipment and renovations under this program. Restaurants are very risky business, however some of the Chartered Banks will look at restaurants if there is enough of an initial equity investment and you have a solid business plan (experienced management team, good concept and strategic location).


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