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Will a franchisor assist me to find finance for the business?
We are lucky in the UK to have a sophisticated banking system that devotes substantial resources to supporting franchising - they do this not because they are nice people (although bankers in the franchise units are nice people), but because they know that providing finance to franchise businesses is good business for them. Most of the big banks have separate franchise units that assist branches in making decisions on financing franchisees. That having been said, banks only support good business proposals and certainly in the early stages some franchisors without any or without a good track record may find it difficult to facilitate bank funding. Whilst ultimately it is always a prospective franchisee’s responsibility to obtain adequate finance, if you do not receive assistance from the franchisor in this area, then this should sound some warning bells. Alternatively, if the franchisor is only able to point you in thedirection of expensive loan providers, that should also put you off. No good franchisor with an established track record will find it difficult to facilitate finance for its franchisees, so if this doesn’t happen you seriously need to contemplate walking away.
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