Step 7. Franchise Award

Franchise Award

Getting the Franchise to say YES to you! Because the franchise is a business in itself and they are trusting their system to the care of each franchisee, the franchisor has a process that will determine if you are a good ﬁt for them. This is important to their business to ensure they will be successful in the long term and that they are only bringing the best candidates into their business. Our goal with this step is to work with you and ensure that you have everything you need to impress the franchisor on the things that they are looking for.

This step usually includes something called Discovery Day. This is when you go to the franchisor’s corporate office to get to know their management team and they will decide if you are the right fit for their company. Depending on the company, you may sign the paperwork for your new franchise during Discovery Day!

The Rest of the Steps

8 Steps to Buying A Franchise

Step 1: Start Franchise Shopping

Step 2: Acquire Funding

Step 3: Compare Your Options

Step 4: Prepare Yourself

Step 5: Franchisor Introductions

Step 6: Due Diligence

Step 7: Franchise Award

Step 8: Become a Franchise Owner

3 Ways to Finance a Franchise

We talked last week about acquiring funding to purchase your franchise. There are several ways for you to finance the purchase of a franchise and today we want to go a little more into detail about what those options are. Keep in mind, your options will depend on your credit score, your net worth and a few other things. These are just options that are available.

SBA Programs

The U.S. Small Business Association helps Americans start, build and grow businesses. One of the things they do is offer an array of financing for small businesses. This ranges from micro lending to substantial debt and equity investment capital.

You can find a lender that offers loans for your business through SBA and the loan will be guaranteed by SBA. This allows you to get competitive terms, you can get additional support and advice from SBA and many of the loans come with unique benefits. Having SBA involved in the loan will reduce the risk for the lender and gives you the buyer easier access to capital.

SBA can help you find an investor through a Small Business Investment Company (SBIC), which are licensed by SBA. These are private investors that participate as limited partners and invest funds into your business.

Business Loan

To be more specific, a Revolving Unsecured line of business credit. An unsecured business line of credit is a debt financing option that offers a revolving credit limit but doesn’t require you to offer up collateral to secure that revolving credit limit. The key here is that you don’t have to offer up collateral. When you are opening a new business, you don’t have collateral related to the business that you can offer up. Because unsecured lines of credit won’t require collateral, they will typically come with higher rates, shorter repayment terms, and lower credit limits.

IRA/401K No Penalty Business Investment

This is the most exciting funding option, in our opinion. Many people have an IRA or a 401K from a current or previous job. There is quite a bit of money sitting in those accounts that you can’t pull out without a penalty but you can invest into securities without penalty. Many people don’t realize that a franchise is a type of security! That means you can allocate funds from your 401K or IRA towards the purchase of a franchise and you won’t get hit with a penalty or taxes that you would if you just pulled the money directly out of one of those accounts.

Next Steps

So what is next? You know what your options are and now you want to move forward and find the right franchise for you. Let’s set up a call so we can talk about what your options are! Fill out the form below and we will get started.