Food & Beverage
Business Funding for Franchise Owners
Franchise ownership comes with built-in brand recognition but also built-in costs. Franchise fees alone range from $10,000 to over $500,000 depending on the brand. Add in buildout costs, equipment packages, and the working capital the franchisor requires you to hold, and the total investment can easily hit seven figures. The upside is that lenders love franchises because they have documented performance data.
Common Uses
What Franchise Owners Use Funding For
- Pay the initial franchise fee and cover pre-opening expenses required by the franchisor
- Fund the buildout and equipping of a new franchise location to brand standards
- Acquire an existing franchise unit from a current franchisee
- Open additional units after proving success with the first location
Funding Options
Best Funding Types for Franchise Owners
SBA 7(a) Loan
The gold standard for franchise funding. The SBA maintains a franchise directory of pre-approved brands, which speeds up the approval process. Loan amounts up to $5 million cover franchise fees, buildout, equipment, and working capital.
Franchisor Financing
Some franchisors offer in-house financing or have preferred lender relationships. These programs are designed around the specific capital requirements of their system and can be faster to close than third-party options.
Equipment Financing
Finance the equipment package separately from the overall buildout to reduce the SBA loan amount. Restaurant franchises in particular have expensive kitchen equipment packages that work well as standalone equipment loans.
What Lenders Look For
Qualification Notes for Franchise Owners
Related Industries
Related Food & Beverage Funding
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