How to fund a franchise
We have helped close to 2000 people invest in franchises. We have worked with franchisors that required an all-in investment under $50K, and have done multi-unit, are development, and master franchise licenses with investments in excess of $5million. An individual’s available capital, the amount of total capital needed, as well as their other assets, credit, business experience, etc., will influence what funding types they have available. However, there are four many ways to fund a franchise; all cash, retirement funds, SBA-backed loans, and private investment.

Each of these can impact the ROI of your franchise. If you are considering becoming a franchisor, your franchise consultant can help guide you to setting up your offering to be most attractive to lenders. If you are a considering becoming a franchisee, these are several of the ways to fund a franchise that may be available to you.
Fund a franchise with all cash
This is obvious, but it deserves a place on the list. I have worked with many investors who have funded this way. The advantages of funding a franchise all cash is that the business is not laden with debt or burdened with servicing, and you are not beholden to shareholders or fighting with partners.

 
Fund a franchise with retirement funds
People often don’t realize that, for many qualifying businesses, you can use retirement funds to fund the business. You are not withdrawing the money, but rather just self-directing it, so you don’t pay the penalties that you would for early cash-out. One of the great advantages of this method is that, if your business is more profitable than you need to sustain it and your lifestyle, you can push issue the profits back to the […]