Funding for franchise
Discussion
A mate is looking into purchasing a franchise from a very well known operator with an upfront fee of approx £80k. Problem is my mate does not have the full £80k! How hard is it to raise finds for such a purpose from a high street bank right now or are there companies that specialise in this area?
Cheers
PL
Cheers
PL
I think that as long as he can raise at least 50% then the bank may probably fund the rest.
Most large franchises will have links with major high street banks to secure funding. They use their own business model as a business plan and route to market.
Again, i think he will need to put in a % himself or some other form of security. Banks won't take 100% of the risk, especially not now.
Most large franchises will have links with major high street banks to secure funding. They use their own business model as a business plan and route to market.
Again, i think he will need to put in a % himself or some other form of security. Banks won't take 100% of the risk, especially not now.
Pappa Lurve said:
A mate is looking into purchasing a franchise from a very well known operator with an upfront fee of approx £80k. Problem is my mate does not have the full £80k! How hard is it to raise finds for such a purpose from a high street bank right now or are there companies that specialise in this area?
Cheers
PL
I guess it depends also upon what sector the franchise is in.Cheers
PL
For instance, I can't imagine a bank being too keen to support a gym franchise for example.
What sector is the business?
He is looking at a franchise from a major chain of cheque cashing companies. He may be able to set up himself but I would imagine that it is a pain to do with all the relevant regulation although I have not looked into that at all so could be wrong!
He lives in a small town where there are a high number of immigrants, many unbanked so it seems like a decent location for one.
He lives in a small town where there are a high number of immigrants, many unbanked so it seems like a decent location for one.
Pappa Lurve said:
He is looking at a franchise from a major chain of cheque cashing companies. He may be able to set up himself but I would imagine that it is a pain to do with all the relevant regulation although I have not looked into that at all so could be wrong!
He lives in a small town where there are a high number of immigrants, many unbanked so it seems like a decent location for one.
Great idea.He lives in a small town where there are a high number of immigrants, many unbanked so it seems like a decent location for one.
Although the next question is, why does he need a franchise?
I have a few friends who have moved into cheques from gold buying from jewellery selling. Seems easy enough. If there is no competition, why the need for a franchise?
Not 100% sure to be honest! there is obviously the advantage of the brand etc but I assumed there are issues around regulation. My background includes working in pre-paid cards and the regulations around them can be a little sticky so I assume its easier to work under some oprganisations umbrella, but no idea if he has looked into it.
escargot said:
Pappa Lurve said:
Not 100% sure to be honest! there is obviously the advantage of the brand etc
I'd agree if you were talking about the likes of Subway, Dominos et al. For a back street cheque cashing/money transfer place, I wouldn't have thought the brand has much value?You could well be correct but I am more concerned to be honest about the regulatory stuff. I assume the other advanatges of the chains is getting involved in Pawnbroking etc. Don't really know to be honest but I'll let my mate know that I was correct in that funding can be got for these kind of things.
All input much appreciated as ever.
All input much appreciated as ever.
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