Franchise Financing

We know franchising inside out from the perspectives of a Franchisee and a Franchisor Marketing, sales, systems, operations, financing, starting a new franchise, franchise sales, and franchisee relations. 

In addition to financing support through debt or direct investment, for franchisees, we can provide expert insight, advice, and mentorship from the outset. For franchisors, we can deliver funding for your franchisees at the start-up stage or for business growth. For emerging franchisors, we can provide debt financing, partner to make a direct investment and provide business systems to accelerate the establishment and growth of your franchise system.

The Franchise Business Model

There are over 3000 franchise brands in North America covering a spectrum of business activities and sectors. They may be business to business, business to consumer or a combination of both business and consumer.

The Franchise Business Model offers a complete and turnkey framework of a successful business based on proven methods, results, and brand equity. Franchises reduce the trial and error, start-up risk, and growth scale up time that business owners may experience by trying the do it yourself approach. Moreover, franchisees have the training and support of an experienced franchisor, the collaborative benefit of being part of a network of business owners who share common systems and resources, technology, marketing, and sales and operating experience combined with service and product innovation. Business value is enhanced through the size, market reach and brand reputation value of the franchise network to acquire and retain customers in contrast to a single location.

The Franchise Business model typically requires an upfront franchise fee based on a geographic or service market territory. The franchisee pays royalty fees to the franchisor and there can also be technology, marketing and other support fees depending on the franchise system.   

Franchisees

You may be considering an investment in your first franchise or opening your tenth. Franchise financing requirements are similar to most business financing needs depending on the stage of the business. These include:

• Franchise fee and business establishment capitalization
• Business start up, expansion or partner buyouts
• Real estate purchase or refinance
• New construction or leasehold improvements
• Furniture, fixtures, and equipment
• Vehicles
• Technology Systems
• Working Capital 
• Buy-sell of existing franchisees
• New Franchisor start up funding
• Emerging Franchisor growth financing

The Franchisor will outline financial requirements and provide information that you need to use to develop business plans. Depending on your financial resources, you may have your own funds, obtain funding from your own resources, or you may require assistance to obtain debt or partner investment. Whatever the source of funds, you must ensure that you have the debt service capacity and capability to meet all financial obligations. In Franchise Agreements, Franchisors also require that you are in compliance with the Franchisor’s credit and financial health criteria. 

Owning a franchise is still owning an independent business - - but under a different business model. Franchisees still face the same financial risks and requirements as all businesses but have additional operational support from the Franchisor.

Structured Finance can act as your Financing CFO to connect your franchisee business plans to financing plans and funding. 

Franchisors

Structured Finance can assist emerging and established Franchisors to support the growth of the Franchisors system and its franchisees.

At the Franchisor level, we can assist in connecting your Franchise System growth plans to funding to make  your system wide scaling plans become reality. Franchise brand equity building, implementing new systems, adding support resources, expanding franchise sales, and other initiatives may require external funds to accelerate the implementation and execution of your plans. 

We can provide smart money that combines our franchising strategy to “boots on the ground” process expertise along with traditional debt to direct investment capital.

At the Franchisee level, we can facilitate financing for your franchisees on a general basis to special circumstance situations. We can help you design financing packages to suit your specific franchise model to facilitate new franchise requirements and proper start-up capitalization. We can work with your sales and field consultants to assist new and existing franchisees through their different growth stages.

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