Franchise Financing

The money you need to start or buy a franchise.

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The #1 trusted funding solutions provider for franchises and their candidates

Franchise Financing

Starting a small business from scratch is complicated. Instead of dealing with the unknown, you can feel confident with a franchise’s proven business model. Guidant works with thousands of franchises, from emerging concepts to established brands – making it easy for you to find the perfect fit for your small business dream.

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Proven Model

Franchises already know how to operate successfully. As a franchisee, you’ll have an experienced helping hand to guide you in opening and operating your new business.

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Brand Recognition

Marketing is easier when you’re buying into an already well-known and recognized brand. Many franchises have spent years developing their brand – so you don’t have to.

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Voted the Best

Based on voting from franchisors and industry experts, we’re consecutively ranked as a top financing supplier by trusted sources like Entrepreneur and Fit Small Business.

Why Franchise and Why Guidant

Nearly 30 percent of small business owners start their business because they’re ready to be their own boss. But it can be overwhelming to start from scratch. You need to develop a business idea, create a model for success, and oversee all aspects of your new business from building to advertising. That’s why franchising is a popular option. By buying into a model that’s already successful, you benefit from a franchise’s experience, guidelines, and support, all while following your small business ownership dreams.

Why Start or Buy a Franchise?

Starting or buying a franchise lets you own your own business without so many of the unknowns that come with developing a new business from scratch. Your franchisor will help you with designing, training, and marketing – taking much of the effort out of your hands. As a franchise owner, you’re in business for yourself, but not by yourself. You have a proven system in place and a team behind you to support your success.

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Proven Success

When you buy into a franchise, you’re buying into a model that’s proven to be successful. The hard work of building a profitable system is already done – all you need to do is follow the guidelines. With a franchise, the risks of your business failing are lower than starting an independent business.

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Less Work, More Support

As a franchisee, you’ll have the support of your franchisor behind you to back you up and save you much of the effort you’d spend as an independent business owner. Your franchisors will provide you location suggestions, construction instructions and building sources, front-to-back training, marketing, advertising and brand support, and continuing education for the duration of your time as a franchisee.

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Easier to Fund

Thanks to a franchise’s proven model of success, many lenders are more likely to fund franchises than start-up businesses. Franchises often work with franchise financing suppliers like Guidant to help you through the funding process by providing financial statements, loan application support, and more.

Why Get Your Franchise Financing from Guidant?

Starting or buying a franchise does requires a capital investment, which can range from a few thousand dollars for home-based franchises to millions for larger, more recognizable brands. But you don’t need to have that money on hand – most franchisees use financing to meet their funding needs. As a leader in franchise financing, Guidant Financial has over 15 years of experience in helping franchisees like you get the funding they need to open their doors.

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Accessible Funding Solutions

We offer a full suite of financing options to help get you the money you need to start or purchase a franchise location. These options have helped over 20,000 small businesses and franchises open. With options including 401(k) Business Financing (also known as Rollovers for Business Start-ups or ROBS), SBA 7(a) Loans, SBA Express loans, Portfolio and Unsecured Loans, and more, we’ve got your franchise financing covered.

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Industry Relationships

We’ve developed relationships with thousands of franchises and industry experts over our 15 years of franchise funding support. We work with successful, leading franchises, from established brands with hundreds of locations to fresh, emerging concepts rapidly gaining popularity. We also work with industry experts, including networks of franchise consultants who can help you discover the perfect brand fit for you.

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Lifetime Support

We’re here for the life of your franchise. Our mission statement is to help people succeed in small business, so we’re committed to supporting you beyond funding. We offer business services to help you manage and grow your business – like integrated payroll and HR services. We also offer access to discounted services through the industry’s leading providers. And if you decide to sell your franchise, we’re here to help make it as easy as possible with our Seller Suite. We’ll complete a business valuation to suggest a fair asking price and provide the tools you need to attract qualified buyers.

How Does Franchising Work?

There are two parties in a franchise relationship: the franchisor and the franchisee. The franchisor is the brand owner, while you’re the franchisee buying into the brand. When you start or buy a franchise location, you’ll pay your franchisor an initial fee and ongoing royalties. In return, your franchisor gives you the right to sell their products or services under their trademarks and provides continued training, support, and access to their proprietary business system.

  1. Determine if Franchising is for You

    Franchising is a great step into business ownership for some, but it’s not for everyone. Those who do best in franchising are usually those who like to have guidelines to follow and proven success to emulate. With franchising, there’s a successful system in place; it’s up to you as the franchisee to follow the guidelines.

  2. Find the Right Franchise Brand

    The right franchise for you is a brand that fits your lifestyle and goals. Are you looking for a brand that will offer very specific steps, or do you want to provide your own flair? What’s your main goal of franchise ownership: financial freedom, more flexibility, fulfilling a dream? The answers to these questions can help you determine what type of franchise will suit your needs.

    Industry knowledge isn’t a prerequisite for franchising. For example, if a restaurant franchise sounds enticing, but you don’t have food knowledge or restaurant experience, don’t kiss your dreams goodbye. Many franchises offer training to help franchisees with little knowledge in their field gain the skills needed to get started.

    Guidant Financial partners with franchising industry leaders and experts, so we offer resources to help you learn about prospective franchises. If you’re not sure which franchise brand is right for you, we can connect you with a franchise consultant to help you weigh your options. If you already have the perfect franchise in mind, we’ll set you up with someone who can tell you more about the brand and go over your qualifications.

  3. Apply as a Franchisee

    Once you’ve selected your ideal franchise, you’ll need to make sure that the brand has territory available in your area. You can check by looking on the franchisor’s website, working with a franchise consultant, or contacting the franchisor directly. Franchisors usually look at territories in advance and generally only award rights to one franchisee per territory. This protects the franchisee from having direct competition from the same brand or oversaturating the market.

    If territory space is available, you’ll next make sure that you meet the franchisor’s qualifications, professionally and financially. These qualifications are usually based around credentials like managerial and leadership skills, initial franchise fees, and net worth.

    Many franchisees rely on some level of financing to fill the total investment need, which is where we come in. With our full suite of financing products, we’ll work with you to figure out the best way to fund your new franchise.

    You’ll also receive the Franchise Disclosure Document (FDD), which spells out franchisee qualifications, starting fees, obligations of both franchisee and franchisor, and more details on how the franchise runs and its financial statements. We can help here, too – our business financing consultants are pros at unraveling FDDs and can help you understand what you need to know.

  4. Complete Training and Open Your Franchise

    When the franchisor has approved your application, and you’ve signed the franchise agreement, you’ll attend franchise training. During training, you’ll learn the ins and outs of the franchisor’s business model, how to establish and run your business, and tips for marketing and acquiring customers. After the training, you’re ready to begin opening your franchise: completing build-out requirements, hiring staff (if necessary), filing business licenses, and other paperwork.

You might also decide to buy a currently existing franchise location instead of opening a new one. If this is the best move for you, your franchisor can help you find a location for sale, and Guidant can help you value it with our Business Valuation Solutions.

Franchises and Financing: FAQs

How independent can I be as a franchisee?

Your independence as a franchise owner will depend on the brand you pick. Every franchise has different guidelines for its franchisees, but generally, you’ll agree to follow your franchisor’s rules on selling products or services, branding, marketing, and business operations. For many small business owners, this is a benefit of franchising – having guidelines in place saves the work of developing a successful business model from scratch.

What are the advantages of franchising over starting an independent business?

Established franchises already operate on a successful business model, which you’ll access as a franchisee. But if you start your own independent business, you’ll be designing your business model from the ground up, leading to a higher chance of business failure.

It’s also easier to get funded with a franchise than an independent business. Many lenders are more likely to finance a franchise, with its proven model of success and brand recognition than they are an unknown independent business.

Other advantages of franchising include:

  • Franchisor assistance with starting your franchise location
  • Established operation if you buy an existing location
  • Continued training and support
  • Provided marketing materials and advertising
  • Purchasing power from your franchisor’s vendor relationships
  • Franchisor research and development

How do I pick the right franchise for me?

The first step to picking the best franchise fit for you is to figure out what type of business interests you the most. There are franchises in nearly every business industry, so narrowing down exactly what you want to do will help you discover the franchise opportunities available to you.

Next, consider what franchise model best fits your lifestyle. Do you want to want to be a solo operation or have employees? Do you want more free time or be deep in your business’s daily operations? How much money do you want to make? The answers to these questions will help you narrow down your search further.

Finally, the practicalities of your new franchise are a huge part of your choice. What is a reasonable cost for you to start or buy a franchise location? How much financing will you need, and how much can you qualify for? Is there a demand for this franchise in your location?

You don’t have to answer all these questions on your own. We’re here to help. We can answer your financing questions, connect you with the franchise you’re interested in to learn more, or set you up with one of our franchise consultant partners to help you find the franchise of your dreams.

Can I grow my business as a franchisee?

Generally, yes! As the owner of a successful franchise location, many franchisors will be happy to sell you another territory so that you can open another location. If you’re interested in keeping your current business but starting another franchise location, you can use your successful business as evidence of your worthiness as an applicant for a franchise and further funding. Usually, you can buy into a different franchise if it’s not a competing concept with your current business. Your franchise agreement will spell out these terms, so make sure you know your options before you sign it, especially if you know you might want to try a different franchise in the future.

Will it be harder to sell my business as a franchisee?

No. In some cases, it’s actually easier than selling an independent business. Franchisors are usually invested in keeping their locations in operation, so the brand you partner with may be able to help you find a buyer. This is called a ‘resale.’ Many franchises partner with a third-party like Guidant to provide seller support through business valuations to provide a fair asking price and resources to help attract prospective buyers.

What kind of franchises are there?

There are franchises in just about any industry you can think of, making it easy to find a franchise in the field of your choice. The most franchised industries are restaurants and hotels. According to the International Franchise Association (IFA), other common franchised service industries are:

  • Home repair and remodeling
  • Carpet cleaning
  • Household furnishings
  • Maintenance and cleaning services

The IFA also notes franchises are often found in business services such as:

  • Accounting
  • Mail processing
  • Advertising services
  • Package shipping
  • Personnel services
  • Printing services

Other commonly franchised industries include:

  • Automotive repairs and services
  • Environmental services
  • Hair salons
  • Health aids and services
  • Computer and phone repair
  • Clothing stores
  • Children’s services

What metrics should I use to compare franchises?

There’s a lot to consider when you’re trying to decide on a franchise. Luckily, franchising is such a popular option for small business ownership that there are great resources to help your search. The International Franchise Association (IFA) recommends looking at these key criteria:

  • Costs
  • Demand
  • Brand Name
  • Experience
  • Competition
  • Training and Support
  • Expansion Plans

It’s also important to understand a franchise’s financials to make sure you’re picking a brand with a proven track record and an attractive future. The two most important financial documents to consider are the franchise’s Balance Sheet and Income Statement. You’ll find this information in your Franchise Disclosure Document (FDD). FDDs can be complicated documents, but you can get help untangling the details with one of Guidant’s expert business consultants or through a lawyer.

How much money do I need to buy or start a franchise location?

The amount of money you need to start or buy a franchise varies depending on the franchise you choose. Costs can vary from a few thousand dollars for smaller or home-based franchises, while more well-known brands can cost over a million dollars. Many franchisors work with companies like Guidant to help you fund your purchase through financing solutions like 401(k) Business Financing, SBA Loans, Unsecured Loans, and more.

What are the challenges of starting a franchise?

It can be expensive to start a franchise, especially if you’re not buying an already existing location. Up-front costs include an initial fee to your franchisor, real estate, and building out your location to fit the franchise’s criteria. Typically, the more well-known the franchise is, the more expensive becoming a franchisee is. But you’re not on your own – most prospective franchisees pursue franchise financing solutions with suppliers like Guidant. Our team of funding experts can help you learn the best financing options for you.

401(k) Business Financing for Your Franchise

Debt-Free Funding. No Tax Penalties.

Star or buy your franchise with your retirement funds. You’ll avoid tax penalties and extra debt, giving you a cash-rich start.

A Quicker Path to Profitability.

401(k) Business Financing isn’t a loan or a distribution. You don’t have to worry about racking up interest or monthly payments. With 401(k) Business Financing, you make money sooner rather than later.

Easy to Qualify.

You don’t need a minimum credit score or risk your house as collateral. If you have $50,000 in rollable retirement funds, you can use Rollovers for Business Startups (ROBS) to fund your franchise.

Funding Your Franchise With an SBA Loan

Big Loans. Low-Interest Rates.

Small Business Administration (SBA) loans offer big benefits like low-interest rates, long repayment terms, and no ballooning costs.

One Application. Many Lenders.

We make it easy for qualified borrowers to get an SBA loan. You’ll reach our extensive network of lenders with one application – and get the perfect fit with a competitive advantage.

Comprehensive Loan Analysis.

SBA loan applications are complicated. That’s why we provide a thorough analysis to make sure everything is right before you apply, giving you the best chance of success.

Unsecured Loans for Franchises

Fast Funding. No Collateral.

If you have good credit and don’t want to risk your home or other assets as collateral, an unsecured business loan offers you fast, easy financing.

Simple Qualification.

It’s easy to apply for an unsecured loan, unlike many other business loans. Because the process is so simple, most loans close in three weeks or less – so you can move fast.

Low Introductory Rates.

Interest rates for unsecured loans start from 0% to 3%. Low-interest rates make unsecured loans an ideal solution for business owners who need short-term financing.