Franchise Financing & The Costs To Open A Franchise

By Author: Whitman Wright
Total Articles: 70
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What does it cost to open a franchise? Things to consider
Getting franchise financing to set up a business is challenging if the borrower has never set up a business before. Lenders feel more comfortable with franchises since there is an existing corporation behind the business venture with a history of doing business.
If you are considering a franchise business opportunity then there are a few things you should keep in mind when approaching a lender.
When making the calculations for your loan be sure to include an extra margin of cash so that you will have some working capital. Setting up a new business also means that you will need some time to build up your client base before you start turning a profit. During this period you will still have to make sure you are meeting your overhead costs and salaries.
Normally the rule of thumb is three to five years before a business is consistently making a profit.
Before going to seek franchise financing you will need to prepare a business plan. Since this is a franchise, the guidelines supplied to you by the parent company will already contain the basic ...
... fee that you will have to pay in order to be permitted to have their franchise. Any additional fees will be based on what is involved for acquiring the facilities for the business.
It would be a good idea to visit any of the franchises for that company and get some basic questions answered. It is important to establish if that brand is popular and doing well. This information should also be included in the business plan.
When choosing a lender it is a good idea to become familiar with their website where many of your questions may already get answered. Some sites will have a 24 hour chat feature where you can contact an agent to get a free quote for your franchise financing.

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