Introductory Phase

It's a Two-Way Street:

The franchise representative will want to learn about you – your goals, experience, and what you're looking for in a business. But this is also your time to gain a high-level understanding of the franchise. Ask Open-Ended Questions: Download the "Exploring the Business Model" document (link provided) to help you structure questions that delve deeper into areas like:

• Day-to-Day Operations: What does a typical day look like for a franchise owner?

• Target Market: Who are the ideal customers for this franchise, and how do they reach them?

• Support System: What kind of ongoing support does the franchisor offer to its franchisees?

• Financial Performance: Can you provide average revenue and profit figures for franchise locations? (Keep in mind past performance doesn't guarantee future results)

Download: Exploring the business model

Funding Considerations

Franchises come with investment requirements. While it might seem early to think about funding, here's why it's important:

• Planning for Success: Knowing your budget early allows you to target franchises that realistically fit your financial goals.

• Funding Strategies: Certain funding options have lead times, so exploring them early can prevent delays.

FranFund Contact

Common Loan Types

• SBA - The Small Business Administration (SBA) is a government agency that provides support to small businesses, including through loan programs. If you are buying a franchise, you may be able to obtain an SBA loan to help finance the purchase.

  There are several types of SBA loans available, including the 7(a) loan program, which is the most common and flexible type of loan offered by the SBA. The 7(a) loan program can be used for a wide range of purposes, including to start a business, expand an existing business, or buy a franchise.

  To qualify for an SBA loan, you generally need to meet certain eligibility requirements, such as being a small business and having a good credit history. You will also need to provide collateral to secure the loan, such as real estate or equipment.

  SBA loans generally have lower interest rates and longer repayment terms than traditional loans, which can make them more attractive for small business owners. However, they may also require more paperwork and take longer to obtain than other types of loans.

  If you are considering buying a franchise and think an SBA loan might be right for you, it is a good idea to do your research and speak with a lender or financial advisor to learn more about the process and whether you meet the eligibility requirements.

• ROBS - A ROBS is an arrangement in which prospective business owners use their retirement funds to pay for new business start-up costs. ROBS plans, while not considered an abusive tax avoidance transaction, are questionable because they may solely benefit one individual – the individual who rolls over his or her existing retirement funds to the ROBS plan in a tax-free transaction. The ROBS plan then uses the rollover assets to purchase the stock of the new C Corporation business.

• HELOC - Loan against Home Value

What to expect from here?

What's Next?

This is just the beginning! As you schedule franchise calls, information will flow freely. Here's how to maximize your initial exploration phase:

• Schedule Calls Quickly: Strike while the iron's hot! Schedule calls soon after your initial contact, while information is fresh in your mind.

• Gather Information: Take thorough notes and ask clarifying questions to fully understand each opportunity.

• Be Decisive: As franchises pique your interest, move forward with them for deeper dives. Download the "Franchise Investigation Procedure" document (link provided) to understand this next stage.

Remember: Taking the initiative with these first calls puts you in control and sets the stage for a successful franchise journey!

Franchise Investigation Procedure Document