Franchising is a large and important part of the American business landscape. Owning a franchise offers an entrepreneur the opportunity to own a business with the benefits of a recognized brand name, an established operating system, and franchisor support. It is less risky than starting a business from scratch. Franchising still requires a lot of capital. Thus, franchise funding is a key element to getting started. 

What are the Costs of Buying a Franchise? 

The costs involved in buying a franchise vary widely by the type of franchised business. However, the elements involved are quite similar. For starters, there is a franchise fee required to license the franchise operating system and brand name. The franchise fee generally includes support services that are provided by the franchisor. In addition, there is a variety of start-up costs which may include such things as leasing a facility, purchasing furniture, fixtures, and equipment, buying inventory, and hiring staff. Franchise funding must consider these start-up costs as well as ongoing costs. 

Franchise Funding Options Can Include: 

• Funding from the franchisor. This funding can come from a lending partner of the franchisor or from the corporation itself. For many franchised brands, this is the first place to look for funding.  

• Commercial bank loans can be used to fund businesses.

• SBA loans are loans that are backed by the Small Business Administration. These loans are made available through their lending partners. These loans typically have better interest rates and terms compared to conventional loans.  

• Franchise funding from alternative lenders can come with less stringent requirements compared to conventional loans.  

• Crowdfunding is a creative way to seek funds for your new enterprise.  

• Self-funding can include using IRA funds, a 401(k) rollover, or a home equity line of credit (HELOC).   

Seek Expert Funding Assistance 

Contact Capital Finance Partners, to secure the franchise funding you need. We can provide franchise loans to help make your business ownership dreams a reality.