As a franchise consultant, we are frequently asked, “How much do I need to invest and how do I get funding?”
It is critical that you understand how funding works and begin the process of obtaining money as soon as possible. It is best to do this while investigating which business will be the best fit for you. Before deciding on a business, the finance should be completed or nearly completed. If not, you could be delaying your progress for months.
The initial investment needs for various franchisees vary. Ideally, the franchise you are interested in has a relationship with a company that specializes in franchise financing.
One or more of the following financing options for your franchise may be available:
• Cash
• Home Equity Line of Credit
• Franchisor Financing
• Bank Loan
• SBA Loan
• Equity Financing
• Retirement Account Financing
• Partners/Friends/Family/Angel Investors
Contact us to learn more about franchising and how it may be a good fit for your long-term goals. We have connections with some of the best financial sources.
Top Tips for Transitioning from Employee to Boss from Franchisees Who Have Done It
Matt Black, a former warehouse worker, made the transition from employee to boss when he purchased a franchise of Benjamin Franklin Plumbing, an Authority Brands firm.
“I had to make a choice,” Black explains. “Did I want to take my future into my own hands, or did I want to leave it to someone else?”
Ten franchisees with comparable experiences to Black shared their insights on the critical measures they took to transition from employee to franchise owner. Continue reading!
FIVE Common Franchise Terms
- Franchisor: A franchisor is the party who grants franchisees the right to utilize its business model, products, and trademark or trade name.
- Franchisee: A person or entity who obtains from the franchisor the right to own and run a business under the franchisor’s trademark or trade name.
- Franchise Disclosure Document (FDD): The Franchise Disclosure Document (FDD) is a legal document that contains 23 elements regarding the franchisor and their system that must be disclosed to franchisees prior to purchase.
- Business format franchise: The most typical model, this format provides more than just the product, service, and trademark. It is a complete business management system that encompasses marketing, training, and operations.
- Product distribution franchise: A supplier-dealer relationship where the franchisee sells the franchisor’s products. The franchisor does not provide a full system of operating the business.
