Franchise purchase

Banks are generally quite willing to lend money for franchising. Franchises, unlike other business ventures, are quite stable because they have a proven business plan. The business has been successful in another area. For these reasons, banks like franchises. They are considered a relatively secure investment.

Banks will want to see a business plan. They will want to know how the business is doing financially, how this will be continued, what profit there will be from the franchise, and how the franchise will work.

Things to include in the business plan are:

• Anticipated costs and spending
  
• Cash flow forecasts
  
• Evidence of past financial successes
  
• Evidence of a contingency (a financial base to fall back on)

As stated, franchises are generally secure investments, and banks are normally keen to assist. However, starting a franchise can require a significant amount of start-up capital, and this may include a sizeable stake from the potential franchisee.