Franchisors should never become lenders.
In other words, if you’re looking to buy a franchise, and the franchise concept you’re interested in offers their own financing….
should need to ask why.
Call me paranoid, but why, (even with the current credit crunch) would a franchisor want to get into the lending game?
Franchisors have a hard enough time keeping up with the ever-changing franchise laws in all 50 states. Why would they want to try to keep up with lending regulations-and all of the reporting and paperwork that goes with it.
And, it’s tough enough for some franchisors to find great franchisees, plus keep them happy and profitable.
What Should Franchisors Do?
- They should focus on perfecting their business systems.
- They should focus on franchisee profitability.
- They should focus on providing top-notch franchisee support.
- They should keep up with the latest technology, and purchase new equipment before it’s needed.
That way, when someone like you-an interested franchise business candidate, is ready to learn about the opportunity, it can sell itself.
Getting A Loan
You…the franchise buyer, are in charge of getting a small business loan.
And, you can do it. Just make sure that your credit is good, and be prepared to approach more than one bank.
Have a strong business plan, too.
And, don’t forget to put aside more than you’ll need if your new business doesn’t break-even as fast as you thought it would.
Finally, go to SBA.Gov and learn all about loans.
Let the franchisor focus on franchising.