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Franchise Financing - Canadian approvals!

Guest post by: Stan Prokop

Article Overview: The article discusses the importance of being properly prepared in assessing franchise financing options in Canada, including tips and strategies and the importance of a trusted business advisor .

Franchise Financing - Canadian approvals!

Franchise Financing is a key part of the total solution that the Canadian entrepreneur needs to put in place when considering the purchase of a new franchise or an existing unit.

Proper franchise financing, coupled with a solid franchise opportunity helps the entrepreneur assure financial and personal goals will be attained.

When we meet with business owners to discuss their Canadian franchise financing needs they often reveal they have contemplated purchasing their own business for quite some time but that financing was an obstacle. We firmly believe that financing should not be an obstacle to success.

The hard reality of franchise financing is actually very simple - that is that if you have a reasonable personal investment into the business ( we'll discuss' reasonable' later ) , and a decent work and credit history that are some great options for franchise financing in Canada .

Many new entrepreneurs are industry or work focused, and they don't consider themselves ' financial types '! That simply emphasizes the point that you should be working with a trusted, credible, and experienced franchise financing advisor who can both guide you through the best solution, and in fact get you the capital that you need . It should not be any mystery that a combination of a strong proposal and application geared towards the type of financing you need almost guarantees total success.

If you don't have a business plan or financial projection for your business you must realize you absolutely need that document. 9 out of 10 of our customers don't have that plan, or recognize the importance of it. In that case we work with the customer, and prepare the plan based on input from you on your projected revenues, profits, expenses, etc. In our experience a winning plan is geared towards financing and not marketing and advertising.

We do get a little concerned when many new budding entrepreneurs come to us with no industry experience in the business they wish to purchase or enter into. That generally speaking is viewed as a negative, it does not mean you wont are financed, it simply means it's a negative point that has to be taken into consideration.

Our experience in franchise financing with Canadian entrepreneurs is that a careful well thought our business plan, cash flow forecast, business summary give you a 95% chance of financing success.

In Canada our firm uses a three pronged strategy to finance franchises - we utilize the CSBF program , working capital term loans, lease financing, and oh yes, the 4th piece of the puzzle - your own investment .

We had referenced previously that your personal investment must be reasonable, there is no absolute number that can be tabled here - simply that an owner equity investment of 10 to 30, perhaps more per cent investment usually carries the approval. We can't over emphasize that each franchise financing differs with client needs re amount, structure, types of assets being financed, etc.

So, our final bottom line - Be prepared, work with a trusted advisor, have credible info, demonstrate you know your business. Soon you will be on the way to franchising success!

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Article Tags: financing solutions, franchise financing Canada, franchise loans



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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).
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]
Canadian Entrepreneurs...let's chat.... - I thought it would be nice to gather up all the Canadian entrepreneurs on one topic to discuss how everyone is getting along. I just realized Evan is Canadian as well! Hope he's able to join the conversation. Look forward to the chat. By the way, I'm in BC. Phil


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