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    4 Replies Latest reply on Jan 9, 2010 6:06 AM by toplender

    Finding Capital to start Franchise

    Joker444 Newbie

      Hello everyone,

      I am trying to figure out a way to get 10k up front cost and 100,000 in equity backing for a retail franchise. The available area is in an established community with minimal competition. The area is very marketable and I am looking to partner with a financial institution. My goal would be to get involved with the area community and promote the company. The company is already traded on NASDAQ and has a good reputation. All front and back end operations are supported by the company in addition to not having any franchise fees. I would be taking full ownership of the franchise and my duties would be to drive sales. I have a strong business background with a masters in management.

      How would anyone propose I start talking to banks? Should I go with a small bank/credit union? That way when I am promoting community involvments, I can say I partner with JOE Bank support your local banking community as well?

      Any advice is welcome....Thank you :-)
        • Re: Finding Capital to start Franchise
          Bridge Navigator
          Please be more specific. Are you going to start a new franchise location of an established franchise concept or are you going to buy an existing franchise that is up and running?

          If it is running, what are its current revenues and earnings and why are they selling?

          The more detail you provide, the better responses you will get.

          Best,
          Greg
          • Re: Finding Capital to start Franchise
            phanio Pioneer
            There are several ways to obtain the financing for this franchise. First, the SBA loves franchises as they know you are not in business alone and the franchisor will usually help repay the loan if the borrower defaults. I would search out both large and small banks in your area and see which of them are offering SBA loan products - find out their criteria and apply to as many as you can. This way, you have a better chance of approval as well as different loans to compare (picking the best for you).

            Also, you might try to seek out investors in your local area. Talk to other professionals like doctors, lawyers, CPAs, etc. Many of these will come together to back you - especially since you are focused on local development. You might even find other business owners or other franchisees to back you. I once helped a person looking to buy an IHOP get funding and backing from a person that had several hotel franchises in the area. The idea here is to get out and start networking - start with your chamber of commerce.
            • Re: Finding Capital to start Franchise
              toplender Newbie
              Hello,

              SBA have a min of 250k but you have to have collateral to leverage...Hows your credit?

              I know a company that can do start ups but you need really good credit..