An Insider’s Guide to Financing a Franchise Purchase
It’s no secret that purchasing a franchise is a great way for entrepreneurs to start their own business with the backing of an established brand. Franchisors have done the leg work and developed systems that assist their franchisees with everything from selecting a location for their new business to selecting and hiring key staff, understanding their industry, setting a marketing strategy, and more so that getting off the ground and becoming profitable is as easy as possible. However, as with any business, there are start-up costs involved that can make it prohibitive for some to buy into the franchise and get their new business off the ground.
So, what is the cash-strapped entrepreneur to do? Looking into a franchise system that has a low start-up cost is a good first step. The lower the initial cost to start the franchise the less likely you will have to seek alternative financing options in the first place, making budget conscious opportunities such as AtWork an attractive option for many. Personal savings or savings from another business are another logical source to cover the costs associated with starting up a new franchise, but this can put the franchisee at risk of personal financial issues should the opportunity not turned out as planned. The same holds true for tapping into home equity or retirement plans; the venture may receive the capital necessary to launch, but the risk of losing personal financial stability may not be worth the potential rewards to many individuals.
Fortunately, there are several financing options available that can help take their dreams to reality. The first for many to consider is financing directly from the franchisor. More and more companies are beginning to offer direct financing for franchisees, often in the form of a promissory note, for a portion of the franchise fees. Some franchises, especially those that are larger and more financially established, are also offering more robust lending options as well, opening up another avenue for potential franchisees to join their system as easily as possible.
Another potential source of funding for aspiring entrepreneurs are third-party lenders. Many franchisors have arranged financing options with outside lenders in order to make their opportunity available to the widest possible audience. AtWork is one such franchise, offering attractive financing options to potential franchisees through established relationships with national lenders. Keep in mind that franchisors merely make the connection to these lending services and it is up to the franchisee to not only research the lender, but also ensure that they have adequate credit and capital to qualify for the loan.
If none of these options seem like a good fit, or if credit history may be an issue, it may be time to talk to a franchising specialist in order to explore more custom-tailored options, such as any government grant programs or lenders that specialize in those with less than optimal credit, that may exist. Additionally, there are a number of web-based and micro lenders out there that may be able to offer financing solutions. However, as with the entire franchise purchasing process, be certain to do your due diligence and not act on any advice without properly researching and vetting both the advice and its source.
These are just a few potential sources for financing to keep in mind as you explore your franchise purchase options and you should be sure to contact the franchise systems you are interested in directly to enquire about what options they specifically offer. If you’d like to learn more about AtWork and the various financing options available to help you take advantage of our low-cost franchise ownership opportunity visit atworkfranchise.com or call 888-553-1745 today!