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Buy your Dream Franchise with Biz2Credit's Franchise Loans
If you've always wanted to start your own business but have been afraid of the financial risk involved, opening a franchise might be the perfect solution for you. With a franchise, you get all of the independence, responsibility, and potential profit associated with owning your own business. But unlike starting a business from scratch, a franchise comes with a proven business model and a well known brand, reducing your risk for failure dramatically. Lenders are well aware of the benefits associated with opening and operating a franchise and are more willing to approve a Franchise Loan than a standard small business loan for a start-up.
Franchise loans typically come with more attractive terms than you are likely to find for any other type of start-up business loan. This is because lenders consider the financial stability, business model, and previous success of the franchise parent company when reviewing a loan application. Banks and alternative lenders are finding franchises to be an increasingly attractive investment. In 2011, the SBA reported approval of $1.5 billion in 7(a) loans for franchises, up from approximately $826 million the previous fiscal year.
Despite the relatively easier access to capital that a franchise owner enjoys, there are many different elements to thing about before purchasing a franchise. Each franchise is operated differently and will come with its' own set of operating and start-up costs. Here are a few things for you to think about:
The Franchise To-Do List
- Make a list of the 10 fastest growing franchises in the country.
- Look for existing franchise networks in your target area.
- Keep up with franchise news.
- Check the minimum amount of capital required to open a franchise. As with any new business, you'll need money for advertising, retail displays, signage, and even your first purchase of inventory. Some franchises offer initial investment help and payment plans. Did you know that Taco Bell is one of most expensive franchises to set up?
- Research the required operational process flow. For example, Quiznos requires 3 people to be involved in preparing a sandwich while Subway requires only one person. That's two additional salaries!
- Research royalty fees charged by the franchise management and the advertising and marketing support they provide.
- Research financial rankings of franchise networks. Banks rank franchises from grade A to D. The A higher grade usually means a lower down payment, less paperwork, and a quicker closing under SBA loan programs.
When it's hot outside, people look for a cool treat. This simple truth led Eric McCarthy right into the Baskin Robbins ice cream business.more testimonials