Will a franchisor help me secure funding for my franchise?

Louise Harris writes:

It’s in a franchisor’s interests to help a good franchisee prospect to secure funding - and indeed the right funding. It should have contacts who can assist - including franchise departments at the major banks - asset finance people if appropriate and other lenders in respect of vehicles if required.

Best practice would be for the franchisor to work with prospect franchisees by providing a template business plan that will be needed for funding. This should include financial projections, cash flow and profit and loss forecasts.

Along with narrative about the franchisee, including their CV, and background on the business itself, there will also be a section that identifies the savings, assets and outgoings of the applicant, which will help inform the level - and possibly type - of borrowing required.

It’s not in a franchisor’s interests to bring people into the network who have overstretched their finances - we like them to be hungry to earn, but not hungry because they can’t afford to eat!

It’s critical that a prospect is honest about their figures and shouldn’t be disappointed if they are declined on the basis of lending. The partnership of franchisor and franchisee is, after all, about both parties running a profitable business.