Why are banks more likely to lend to a prospective franchisee than a new independent business?

I should start by saying that you are working on a false premise if you think that this is true for all franchises. The first franchisees for a new, relatively unproven franchise that has not been developed with the help of British Franchise Association-affiliated consultants and lawyers will get no better terms from a bank than will an independent start-up. Indeed, depending on which non-approved advisers have been used, the potential franchisee may not be able to get any funding at all, whereas an independent start-up with experience of the sector in which it intends to do business may get it relatively easily.On the positive side, franchisees of a well structured, relatively proven franchise that is also a member of the bfa are often welcomed by the banks because they represent a much safer lending proposition. This is simply because the experience that a franchisor brings to the party, together with the initial and continuing training and support that comes as an integral part of the package, virtually ensures the franchisee will not fail, provided of course that the latter follows the system and does everything that they should. Comparison of business failure statistics provided by HMRC and franchisee failure statistics provided by the annual NatWest/bfa survey of franchising often suggest that franchisees of well structured franchised networks are five times more likely to stay in business over a given period than are independent start-ups.