Finance for franchisees and franchisors
An established franchise brings something most new businesses cannot: a proven model with real numbers behind it. Lenders take that seriously.
Request a callback- Commonly funded
- Fees, fit-out, equipment
- Typical facilities
- Term loans, asset finance
- Lender focus
- Brand track record
This page describes what businesses in this sector typically fund and what lenders generally look for. It is not a recommendation, and what is available to you depends on your own circumstances.
About franchising
Buying into an established franchise sidesteps the usual problem with start-up lending. Instead of asking a funder to believe a forecast, you can point to how comparable outlets actually perform, and several lenders maintain views on particular franchise brands for exactly that reason.
The strength of the brand does much of the work. A network with a long record and low failure rates supports better terms than a young franchise still proving itself. Existing franchisees expanding to a second or third site generally find funding easier again, because their own numbers now form part of the evidence.
What gets funded
- Initial franchise fees and territory rights.
- Site fit-out to the franchisor's specification.
- Equipment packages, vehicles and branded livery.
- Opening stock and initial working capital.
- Acquisition of an existing outlet from another franchisee.
- Expansion into additional territories or sites.
What lenders want to see
- The franchise agreement itself, including term, renewal rights and territory.
- Performance data from comparable outlets in the network.
- The franchisor's track record, including how many outlets have failed.
- Your own experience, and what you are contributing personally.
- Whether the brand appears on any lender's recognised franchise list.
Frequently asked
Is franchise funding easier than ordinary start-up lending?
Usually, yes, provided the brand is established. The lender can assess a proven model rather than a forecast, which materially changes the risk. A new or unproven franchise is treated much more like a conventional start-up.
Can I fund a second outlet?
Generally more easily than the first. You now have trading figures of your own and a demonstrated ability to run the model, both of which count for a great deal. Multi-site franchisees often move to a facility structure rather than separate loans.
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