Franchise Financing to Start or Grow Your Franchise Business
Have you always dreamed of starting a business but find the idea of starting from scratch a bit overwhelming? If so, owning a franchise might be perfect for you. As a franchisee, you become a member of a franchise family with a parent corporation helping you get your business off the ground. You have use of your parent’s trademark, access to a proven successful business system, and ongoing support.
When you become a franchisee, you will need to be able to pay the following fees.
• Franchise Fee – The parent company (the franchisor) charges you a start-up fee payable in a lump sum or installments.
• Royalties – Once in operation, you will owe royalty fees to the parent company – a percentage of your gross revenue or a fixed periodic amount.
• Advertising Fees – Your franchisor may require you to participate in a common advertising/marketing fund.
How to Get Franchise Financing
• Franchisor Programs – Many franchisors offer franchise financing options to help potential franchisees get started and existing franchisees to expand.
• Commercial Bank Loans – If you qualify, a commercial bank can give you a term loan in the form of a lump sum which you pay back with interest over a set period of time.
• Small Business Administration (SBA) Programs – The SBA doesn’t make loans directly; it helps secure loans that are partially guaranteed by the federal government. Of particular interest to franchisees are the SBA’s 7(a) and CDC/504 programs. The SBA also has a franchise registry of approved brands.
• Alternative Lenders – Specialized alternative lenders provide loans for franchise financing. This type of franchise funding will cost you more, but qualifications are less strict, and you don’t have to wait for months to get approved (or not).
We Can Help You
As a franchisee, you can make your entrepreneurial dream come true under the umbrella of a proven business model. Norris Commercial Capital is committed to providing franchise financing for new franchisees and existing ones who need capital to grow their businesses. Contact us today for a consultation.