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post #1 of 32 (permalink) Old 03-24-2008, 08:58 AM Thread Starter
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Need info on financing a franchise

I need info on financing a franchise. I am throwing around the idea of becoming a business owner and am looking into a children's type franchise. What things can be used as collatteral besides the house. I won't put the house up as collateral. Also, how do you come up with the money to put down on the business if you don't have that type of cash on hand. It sounds like I may have to put the franchise fee down.
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post #2 of 32 (permalink) Old 03-24-2008, 09:05 AM
 
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Originally Posted by HDTony's Wife View Post
I need info on financing a franchise. I am throwing around the idea of becoming a business owner and am looking into a children's type franchise. What things can be used as collatteral besides the house. I won't put the house up as collateral. Also, how do you come up with the money to put down on the business if you don't have that type of cash on hand. It sounds like I may have to put the franchise fee down.
You're a woman so look into an SBA loan, although I'm not sure how the availability is now with the credit crunch...
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post #3 of 32 (permalink) Old 03-24-2008, 09:22 AM
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+1 on SBA loan

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post #4 of 32 (permalink) Old 03-24-2008, 09:47 AM
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post #5 of 32 (permalink) Old 03-24-2008, 10:25 AM
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Also, how do you come up with the money to put down on the business if you don't have that type of cash on hand. It sounds like I may have to put the franchise fee down.
members helped out with a field trip for the kiddies. they'll paypal to fund your business too.

if you don't want to put up the house as collateral (which you shouldn't!), most people go the route of filing a very detailed business plan to solicit for investors.

I've had some friends open up successful restaurants this way. They sold shares to finance their business. 1 share = $20000 investment. The shares were paid off in 5 years and the investors are still paid with an annual dividend.

Last edited by Ernie; 03-24-2008 at 10:31 AM.
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post #6 of 32 (permalink) Old 03-24-2008, 10:26 AM
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Mao has cash
Paul has even more cash
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post #7 of 32 (permalink) Old 03-24-2008, 11:00 AM
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Quote:
Originally Posted by HDTony's Wife View Post
I need info on financing a franchise. I am throwing around the idea of becoming a business owner and am looking into a children's type franchise. What things can be used as collatteral besides the house. I won't put the house up as collateral. Also, how do you come up with the money to put down on the business if you don't have that type of cash on hand. It sounds like I may have to put the franchise fee down.
SBA loans, as far as I know, don't hand out unsecured loans (no collateral). How much money are you looking to get? If it's not a lot... you can get unsecured personal loan from your bank or go through a credit union. As mentioned before get some capital investors if its a large amount.

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post #8 of 32 (permalink) Old 03-24-2008, 11:44 AM
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Wink is a good resource for this type of question. PM him.

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post #9 of 32 (permalink) Old 03-24-2008, 11:47 AM
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Hey hon check the il dept of commerce site, i think theres a section on there for female owned business grants




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post #10 of 32 (permalink) Old 03-24-2008, 11:52 AM
 
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Hey hon check the il dept of commerce site, i think theres a section on there for female owned business grants
Use Tony's Duc as collateral and then permanently run the company into the ground.
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post #11 of 32 (permalink) Old 03-24-2008, 12:15 PM
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Use Tony's Duc as collateral and then permanently run the company into the ground.
there just has to be a "mao has cash for your..." joke here somewhere

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post #12 of 32 (permalink) Old 03-24-2008, 12:26 PM
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Mao will give you the cash if he can watch the duc if he can watch it being smashed in the crusher

go time traveler style and go back in time, fuck his grandma, then shoot forward in time and then fuck his mom. Then return back to present state and call him a the product of two incest whores and hes your son and show video of you plowing the both members of his family. .
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post #13 of 32 (permalink) Old 03-24-2008, 12:38 PM
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Originally Posted by code2medic View Post
Mao will give you the cash if he can watch the duc if he can watch it being smashed in the crusher
No. I only want to crush a new 1098 not a 10 year old Duc. That would be a waste of crusher resources.

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post #14 of 32 (permalink) Old 03-24-2008, 12:50 PM
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What type of franchise?

Why not just start your own company/small business/corp.?
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post #15 of 32 (permalink) Old 03-24-2008, 12:55 PM
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Quote:
Originally Posted by bhauditech View Post
What type of franchise?

Why not just start your own company/small business/corp.?
Franchises supply quite a bit to make it "easier" for you to get started.

I'd look into the exact franchises you are interested in and see what requirements they have. You will also need a lawyer. Don't do this without a good business attorney. Some franchises will loan you the money on consignment and you pay it from the profit of the business in addition to the franchise fees. A good business plan is always useful for banks. If you have a good relationship with your bank, see what their business loan department can do. They can advise you as well. I've received some great advice on business finances from Citibank when I was with them.

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post #16 of 32 (permalink) Old 03-24-2008, 01:17 PM
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Franchises supply quite a bit to make it "easier" for you to get started.

I'd look into the exact franchises you are interested in and see what requirements they have. You will also need a lawyer. Don't do this without a good business attorney. Some franchises will loan you the money on consignment and you pay it from the profit of the business in addition to the franchise fees. A good business plan is always useful for banks. If you have a good relationship with your bank, see what their business loan department can do. They can advise you as well. I've received some great advice on business finances from Citibank when I was with them.
I pretty much agree with you. But I if you have a good lawyer/accountant, a good relationship with a local bank and a solid business plan you shouldnt invest in a franchise. You should invest it in YOUR business. I also think that doing all the planning yourself gives you alot better understanding of whats involved and if your plan is going to work.
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post #17 of 32 (permalink) Old 03-24-2008, 01:19 PM
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Franchise idea: Can someone franchise a Buffalo Wild Wings in Forest Park on Madison or in Oak Park on Lake Street, please?

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post #18 of 32 (permalink) Old 03-24-2008, 01:35 PM
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SBA will want your house as collateral to start any businesses. On top of that you will need a solid buisness plan and at least 20% down.

You have to think about what assets you are putting up with this business. With a Kids business, day care or hair cutting (my bank financed several of these in Naperville) there really are no assets, most property is leased. If it is your first entry in to this type of business you will have to consider the lien on the home. Other income from your spouse will help out on the application also.

Is this going in a strip mall, I hear Tony likes those..
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post #19 of 32 (permalink) Old 03-24-2008, 01:36 PM
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Franchise idea: Can someone franchise a Buffalo Wild Wings in Forest Park on Madison or in Oak Park on Lake Street, please?
One guy bought the rights to all the franchises in IL.
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post #20 of 32 (permalink) Old 03-24-2008, 02:00 PM
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i can give advise, but thats for your ears off line. i am not gonna openly share my thoughts of whats worked for me 4 times in a row.



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post #21 of 32 (permalink) Old 03-24-2008, 02:01 PM
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i can give advise, but thats for your ears off line. i am not gonna openly share my thoughts of whats worked for me 4 times in a row.
I look at the avatar and the only thing that comes to mind is knocking off a armored car. I guess that might work also..

WTF... no changing avatars until this thread is old. Now I think about you knocking off a lemonade stand..

Last edited by CHI1000RR; 03-24-2008 at 02:59 PM.
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post #22 of 32 (permalink) Old 03-24-2008, 02:03 PM
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my little humor on line with you guys is 1 thing,

but make no mistake my off line business matters are as hard core as you can get.



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post #23 of 32 (permalink) Old 03-24-2008, 02:53 PM
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post #24 of 32 (permalink) Old 03-24-2008, 02:57 PM Thread Starter
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Marlene : I was kidding when I suggested you open a Starbucks if you wanted to see Tony more often.

I am quite the fan of Starbucks myself, he just has more time in the real world everyday than me. I would be 900 lbs if I owned a Starbucks.
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post #25 of 32 (permalink) Old 03-24-2008, 05:02 PM
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Buying a franchise is like having a boss still looking over your shoulders making sure you are doing things the way they want. I would go your own route. it would be a little cheaper to. No franchise fees to pay.
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post #26 of 32 (permalink) Old 03-24-2008, 05:06 PM
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Buying a franchise is like having a boss still looking over your shoulders making sure you are doing things the way they want. I would go your own route. it would be a little cheaper to. No franchise fees to pay.
A franchise gets you instant brand recognition and advertising. Things you would pay money for anyways. It also gives you an idea how other stores are doing in different areas. Think about it, if you like Subway and drive by one, you will stop and eat there. Joe's Sub Place, I would not. Location is another important aspect.

By the way, Starbucks does not offer true franchises. They do let places advertise that they use Starbucks coffee but it is not the same.
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post #27 of 32 (permalink) Old 03-24-2008, 05:14 PM
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A franchise gets you instant brand recognition and advertising. Things you would pay money for anyways. It also gives you an idea how other stores are doing in different areas. Think about it, if you like Subway and drive by one, you will stop and eat there. Joe's Sub Place, I would not. Location is another important aspect.

By the way, Starbucks does not offer true franchises. They do let places advertise that they use Starbucks coffee but it is not the same.
correct. you are buying a turn key operation. 1 a monkey can run (almost) and that is why you pay upfront, and monthly royalties. make no mistake. any business is a risk. its more inviting to do a turn key but you pay for it, and keep paying for it.


many factors 1 that most people will lock up and have a brain freeze unless you have been doing business for years, then you can relate.

but plain and simple it takes money to make money. be it your own or someone else's (which now % holder in all your stuff)



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post #28 of 32 (permalink) Old 03-25-2008, 09:26 AM

 
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Before you go with a franchise, be sure that what you get from them is worth the money. A lot of times, there is up front fees. Sometimes there are monthly fees or you pay a percentage of your profits. If you purchase supplies, sometimes your limited to their suppliers as well.

Be sure the franchise is right for you. Also be sure the franchisee had your interests in mind. Be sure they won't let 5 other franchises open next door to you etc.

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post #29 of 32 (permalink) Old 03-25-2008, 09:36 AM
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99% of new business owners use a home equity as start up money. Again, this is another way of putting your house on the line. Others have cash on hand or line up partners. It will be challenging to get an unsecured loan for a start up.
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post #30 of 32 (permalink) Old 03-25-2008, 10:25 AM
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From past experience, the SBA and most outside investors will hesitate unless you have "skin in the game". Why should they feel the pain if you don't? Cash or Home Equity loans are kings, especially if you want a low interest rate.

+1 on a detailed business plan in any case and not the one provided by the franchise organization, but that is the MBA in me talking.

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