What Are the Main Ways to Fund a Franchise?

A franchise provides you with the right to sell products or services under a brand name. This is in exchange for certain fees and royalties.

Purchasing a franchise is a great way to start a business, using an already established brand and client base. However before purchasing, you must consider in depth all of the purchase and running costs involved.

The cost of buying a franchise can vary greatly, but on average it can cost in the region of £50,000.

Funding

It may be possible to obtain a business loan to fund a franchise start-up. A full and detailed business plan will be required, and it will need to include details such as the business structure. An in-depth credit reference report will also be carried out. Loans are rarely offered on a 100% basis, with 70% being the average amount borrowed.

Asset finance can be used to purchase any equipment that is required. This could include short- or long-term leasing agreements. Alternatively, you can aim to pay off the equipment with a hire purchase agreement that eventually leads to ownership.

Line of credit arrangements are financing options that are used on an as-and-when-needed basis. These are usually associated with the day-to-day running costs of the business franchise. This could include things such as a business overdraft facility or a company credit card.

As well as borrowing, options such as grants, obtaining venture capital or asking friends and family for financial support are also possible.

Franchise My Business

On the other end of the scale, business owners who wish to franchise their business out can experience many benefits such as business growth and expansion. It is possible to build up a national network without the associated complications of overseeing a management infrastructure.

If you are considering the option to franchise my business, dedicated franchise consultants such as www.ashtonsfranchise.com/franchise-my-business can provide expert advice and support.

A franchise consultant works with businesses to effectively develop a franchise model, saving time and costs in the process whilst maximizing potential.