Franchises are consistently vulnerable to cash flow issues thanks to the many mandatory expenses they face throughout the year. On top of operational expenses and growth-related investments, franchises must obey their parent company’s fee guidelines, or “Franchisor.” Royalty and advertising fees are deducted from weekly or monthly sales. Some franchise owners must pay for new employees to undergo special training programs. Certain upgrades might be required for specific dates, and the national marketing campaigns that come from the aforementioned deduction must usually be supplemented by local advertising.
The challenge is even greater for franchise owners looking to open new locations. They must pay a “franchise fee” amounting to tens of thousands of dollars, and the aforementioned deductions begin as soon as the new location opens its doors. Combine these expenses with inevitabilities like new equipment or furniture, and you can see why business loans are popular for franchises. Multiple large expenses can easily pile up simultaneously, making it extremely difficult to raise profits or save money.
And don’t forget that franchise owners don’t get to choose when to schedule expenses or which suppliers to work with, unlike their independently-owned competitors. The franchisor might have passed down their business model. Still, it’s up to the franchise owner to figure out how to grow the business without endangering profits or failing to cover mandatory expenses.
United Capital Source has many years of experience facilitating Small Business Loans for Franchises. We have access to all types of business loan products. Contact us today for your FREE business funding consultation!
Lots of people crave the responsibility of entrepreneurship but aren’t up to the task of starting an entirely new business. Maybe they don’t know what kind of business to start…
Being a hardware store means you need to have inventory. Inventory means you need to have space. One of our Ace Hardware franchise clients used the funding to expand their current store and continue to grow this location.
Part of being able to carry the name of a prestigious franchise means that you need to keep up with the current store design trends. One of our Subway clients used their funds to update the interior look & feel and exterior signage.
This Holiday Inn saw a prime opportunity to expand one of its wings and did so in their offseason to book more stays during the busy season.
This Goodyear location was short on cash flow from hiring a few more employees, so they needed a boost fast! This client used their funds to restock their location for the upcoming season.
This UPS Store franchisee saw a great opportunity to expand into a great location with tons of foot traffic in a business district. We helped them get the funding they needed in time to secure this location and expand their stores.
United Capital Source offers franchise business loans, or franchise financing, to help franchise owners invest in growth, open new locations, and stabilize revenue amid upcoming bills or deductions. We understand that franchises deal with an above-average amount of weekly and monthly expenses. This is why our franchise business loans tend to carry repayment systems different from those assigned to an independently-owned business. Terms will be structured to ensure your deductions do not prevent you from paying your rent and employees at the end of the month.
Our franchise clients have been recommended various business funding programs such as merchant cash advances or short-term working capital loans. Both options can allow you to cover a massive upfront cost, increase staff, launch a local ad campaign, or pay a series of coinciding bills. Since profit margins for restaurants and retailers are already on the low side, we can provide the means to make important payments ahead of schedule and lessen the blow from weekly deductions.
We also specialize in opening new franchise locations. Some of our franchise clients have used franchise financing to cover franchise fees, pay for new equipment upfront, or prevent weekly deductions from damaging profits during slow or busy periods. Franchise financing can act as a cushion for monthly expenses and make it possible to grow existing locations on schedule after opening new ones.
Many franchise owners have likely avoided small business loans because they are busy enough already. When you open a new franchise, you must simultaneously take on the roles of recruiter, accountant, sales executive, and HR manager. However, franchise business loans can be accessed in just a few business days, and you don’t have to play three rounds of phone tag to have a question answered. With a merchant cash advance, payments are automatically deducted from sales and require no manual action from the business owner. It is literally impossible to “miss” a payment.
