A franchise can be a good way to start a business. If this is an option you are considering, then you should look at your finance options to decide how best to fund it.
What funds do you need?
There are a number of costs associated with starting a franchise. There is the initial franchise fee. This cost can vary, ranging from a few hundred pounds up to over a million. You will need to rent premises, purchase any equipment needed to run the franchise, and pay staff wages. You will also need to have enough to live on after all expenses have been paid until your franchise is profitable, something that may take over a year.
If you are unsure about what costs may be involved, it is worth getting expert advice. If you do an internet search for something like ‘franchise my business,’ you will find professional support such as https://www.ashtonsfranchise.com/franchise-my-business.
Obtaining finance
Most people do not have the money to properly fund a franchise and so will seek external funding. This may be obtained from a bank. Other options include specialist franchise organisations like the Enterprise Franchise Guarantee, Local Enterprise Partnerships designed to support local businesses, or BFA-approved grants like Virgin Startup or the Prince’s Trust.
Avoid rejection
When approaching lenders, make sure you have a solid business plan with realistic estimates of turnover and choose a franchise with a reputation for success. You should also make sure your own finances are in order, with a good credit history and sufficient collateral for loan security.