Franchise Loans

You’ve noticed that your company is running, no, sprinting and that you might be on to something. Your company’s business plan has been improved and honed into a successful one that you are confident in. Now that you want to compete with the big guys, you’re considering making the next step and franchising your company.

Franchising might be one of the finest options if you have a small, successful firm that you believe will succeed just as well in the town next door. Aim high and make sure everything goes according to plan if you want to dominate the market.

Why choose Smart Funding Solutions?​

What's the difference between a business and a franchise?

What's the difference between a business and a franchise?

The majority of franchises are truly "small businesses," but it's crucial to distinguish between the two.
Any type of good or service that is traded for cash or other products or services qualifies as a "small business."
On the other hand, a franchise is a firm in which the owners, also referred to as "franchisers," are given permission by a business or the government to sell the rights to their business to independent outlets, or "franchisees." This makes it possible for franchisees to run their businesses from a different locations.

A franchisor will need to provide to the franchisee it’s

A franchisor will need to provide to the franchisee it’s:

Trade Name | Products and services
The entire system and know-how for operating the business
There are franchises wherever you look, and no matter where you are in the world, you always know what to expect when you go in. Since their business model is effective and well-known, the franchisee may start with confidence knowing that it will function as intended.

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Is franchising a good fit for my business?

Is franchising a good fit for my business?

You could be questioning if franchising is the best move for your company or even if a chain would be more advantageous before we get to the franchising advice.
Though we sure wish there was, there isn't a crystal ball to gaze into the future and determine whether franchising is the best course of action. The only real method to determine whether franchising your company is the appropriate option is to meet with a consultant or possibly someone you know who has already franchised their company.


What’s the difference between a chain and a franchise?

A chain and a franchise differ primarily in one way. In a chain, there is a single-parent corporation that owns every site and is in charge of running the entire enterprise. However, independent proprietors will run the various stores in a franchise.


Principal advantages of franchising:

Capital expansion: Since franchisees pay to purchase outlets, you can increase the number of your sites without spending a lot of your own money.
There is virtually little expansion risk when you franchise your business, and the financial rewards can be great. A chain would need you to assume far greater risk, whereas franchising requires you to invest very little money in opening up new sites. If you franchise instead of starting a chain and managing it yourself, your profits may be larger.

Disadvantages of franchising:

Disadvantages of franchising:

Less control — For those of you who are control freaks, franchising may not be the ideal solution. As opposed to your personnel, a franchisee cannot be ordered to complete a task your way. Due to the independent company ownership of each branch, future conflicts may arise.
Challenges with flexibility include the need to get your franchisees on board with new ideas (products or services), which could make it more difficult to expand your firm or stay up with the competition. To ensure that they accept whatever it is you wish to introduce, you would need to bargain with them. It is therefore ideal to have this in writing before beginning.

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How to franchise your business:

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You need to make sure you’re organised before you even begin the process. If franchisees want their store to be as successful as yours, they must understand how your company runs.

For this, you’ll need to create the holy book of your company—a guidebook outlining how to run your company—so that franchisees can use it to get started. This must include specific information about your rules, best practices, etc. This guide will undoubtedly be helpful in the future, even if you ultimately decide against franchising.

It’s not a question, this. Throughout the process, you will want a knowledgeable franchise lawyer. Here, you’ll need to complete several pieces of paperwork with your lawyer. A qualified franchise lawyer will guide you through the procedure, even though it may appear complicated and include a lot of paperwork.

Since they are representing YOU, everyone naturally wants to ensure that their franchisees are at the top of their game, but it’s also crucial that you get along with the individual. You don’t have to be best friends, but you will need to be able to work together efficiently to avoid starting World War III.

Your franchisees ought to be reasonable, have a history of proving they can manage a business, and ideally, love your brand. Make a list of the qualities you are seeking and stick to it. Your company’s reputation is on the line here!

Think about starting your first franchise close to your current location so that locals will hopefully know it, but not too close because you don’t want it to hurt your current store’s sales. Then, as you grow, move toward the outside. Before opening a store in the middle of the desert, try to make sure that these sites are accessible because you’ll probably want to keep an eye on them.

Communication is crucial here. Don’t allow them to leave voicemails or leave their calls unanswered for more than 24 hours. Take their calls, offer your assistance, and let them know you are willing to assist them in any manner. After all, your success depends on theirs.

You might also wish to build up a channel for communication amongst your franchisees.

What is the cost of franchising your company?

The initial stages of franchising are the most expensive because all the legal paperwork must be handled and the franchisees require setup help and training.

How long is a piece of string? Giving a general figure for how much it will cost to go from business to franchise is a bit like asking how long a piece of string is. It depends on the business and the decisions you take.

Costs will include:

You’ll need to apply for a business loan if you’re determined to franchise your company but aren’t sure you can pay the start-up costs. Make sure you’ve carefully considered the advantages and disadvantages to determine whether franchising makes sense for your particular business model.

Smart Funding Solutions can help find the best loan available – enquire now to see how we can assist.

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How does it work?

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A member of the team will be in touch to collect some basic information. This helps us understand the type of funding that would best suit your business.

We find the best funding for you

We use the information you provided to source the best funding options for you and your business using our panel of over 250 lenders.

We present your options

We’ll then present you will all of the funding options available to you and give you time to decide which one you would like to proceed with.

How does it work?

How does it work?

A franchise is "a form of licence that an individual (the franchisee) obtains to provide them access to a company's (the franchiser) intellectual knowledge, processes, and trademarks to permit the individual to sell a product or offer a service under the name of the company."
For instance, McDonald's is among the most well-known franchises. When someone opens a McDonald's, they do not have complete exclusive control over how that location is run. As a franchisee of the McDonald's Corporation, the proprietor of that branch is obligated to adhere to the corporate operational standards.
Even while that could seem a little confining to someone who wishes to manage their own franchised business, the advantages of launching a franchise are a big draw.

What's the difference between a business and a franchise?

Starting a franchise?

Starting a business is not an easy or simple endeavour to accomplish, but beginning a business from scratch without any knowledge of what works and what doesn't is much more challenging.
To learn everything there is to know about franchise opportunities and how to take advantage of them, read on as we delve into the vast world of franchise enterprises.

Where does the franchise industry stand?

There are plenty of franchise opportunities available; in fact, according to Franchise Supermarket, the franchise sector now contributes £15 billion (46% growth over the previous ten years) to the UK economy and employs about 18 million people.
Since so many people have taken advantage of franchise opportunities, logic would dictate that there must be substantial benefits to owning a franchise (as opposed to traditional small business ownership).

Brand recognition: It makes sense that a franchiser's name is well-known among customers because they have established themselves and demonstrated the viability of their business strategy. Customers will be more likely to purchase your product without questioning the quality of the service or goods as this is the case.
Higher success rate – once more, because the business has already demonstrated the viability of its model, it is far more likely to do so in the future than a startup that hasn't had the same exposure to the real market.

It is not necessary to have prior experience because many franchise possibilities will give you the training to maintain a constant corporate culture throughout all of your branches. For those who want to establish their own local business but lack the necessary business knowledge, this is a huge advantage.
Opening a franchise does, however, come at a cost, and those prices aren't merely financial, as is the case with most good things in life.

What are the costs of opening a franchise?

Although the benefits of starting a franchise can be alluring, it’s as important—if not more so—to think about the costs and hazards involved. Although franchise funding made the list of “benefits,” there are still other vital considerations to weigh when considering starting franchises in the UK.

A franchise can be opened for anywhere between a few thousand pounds and a few million, including the fees for securing the rights to trademarks, paying deposits, furnishing the store, ensuring that all logistical codes and regulations are followed, landscaping, supplies and inventory, and other costs.

Build-out expenses are the sum of these costs. The franchisor will frequently provide you with an estimate of your build-out costs.

Franchise opening expenses and risks:

There is little room for flexibility because opening a franchise requires signing a contract with the franchisor, who will provide strict guidelines on how to run the business and shape the customer experience, where to locate the business, and which products and services you are allowed to offer. They will also tell you where to get your inventory.

Damage by association: Since your company’s name will be shared by many of its branches, poor service standards will therefore unavoidably reflect poorly on the rest of your organisation. Before making a deal with a company, it’s crucial to find out how they handle that kind of circumstance.

Ongoing franchise fees – in addition to the build-out fees at the beginning, some fees will be charged to your business as long as it is a franchisee-run business.

There is no requirement for franchisors to renew contracts because they hold exclusive rights to the information, procedures, and trademarks. As a result, they are free to choose whether or not to do so. Given that franchisees may never be sure when their store will be closed, this essentially means that they are taking on extra risk.

What can a loan for your franchise be used for?

Franchise Fee – There will always be an initial franchise cost, irrespective of the franchise brand you are considering. While the majority of franchises price between £500 and £300,000, they can be substantially higher (if they are a well-known, very profitable company) or much lesser (if they are home-based). Franchise company loans might assist you in starting out.

Build-out costs – Build-out charges cover a wide range of costs associated with the actual construction of the branch you plan to build. You can lower these costs by seeking franchise capital from one of the several franchise financing lenders accessible.

Charges that would fall under build-out costs include:

Reviewing each of the required documentation is essential if you’re thinking about becoming a franchisee. The process of filling out and evaluating those forms typically involves a significant amount of paperwork, thus it is always recommended that you consult with a skilled professional franchise lawyer.

Depending on the attorney’s fees and the amount of time you spend with them, the charges associated with filing legal documents might range from £1,500 to £5,000. To pay for the legal costs of launching your business, use franchise funding.

Whether you’re discussing durable or perishable goods, your business will inevitably need to stock and replenish its inventory. Each company has a unique set of services, therefore each will have a particular set of products needed to keep things running smoothly. Of course, the prices will vary from one business to the next.

You’ll want to take some time to consider the franchise finance sources that you can use to meet those charges, even if your franchisor may very possibly provide you with an estimate of the entire costs associated with providing your firm.

You’ll want to take some time to consider the franchise finance sources that you can use to meet those charges, even if your franchisor may very possibly provide you with an estimate of the entire costs associated with providing your firm.

Working capital is essentially the amount of cash on hand for everyday operations. Depending on the brand, different franchisees will require different amounts of cash on hand daily.

Typically, the franchisor will provide an estimate of the working capital requirements for each of its franchisees. The quantity that should be kept on hand is usually calculated according to how long working capital should be able to fund business expenses.

Franchise loans and application processes can be a minefield, which is why as a credit broker, we make business finance simple by matching you with your ideal lender and product to help your franchised business grow. The initial setup cost can be high, but we aim to help with cash flow from the very beginning of your franchising journey. 

Why should I submit a loan application to Smart Funding Solutions for a franchise?

It can be tedious to go through the unending list of financing lenders that provide funding for franchises, but it doesn’t have to be a burden. Smart Funding Solutions assists both potential and current franchisees in finding the best franchise finance and finance options for a limited company, sole trader or limited liability partnership.

Regardless of your credit history, we have several options outside of your typical high street banks and bank loans. From start up loans, to business owners looking to expand and franchise resales,  securing funding through us couldn’t be easier. Some lenders may require you to use some of your personal finance as a down payment and they may also charge an initial franchise fee, it’s important to weigh up all the funding options available to you.

In order to obtain your cash as soon as feasible, Smart Funding Solutions can immediately evaluate your financial background. We deliver an experience that is specialised to the demands of your business using the knowledge gained by analysing the health of your organisation.

The finest element of the service provided by Smart Funding Solutions is that you will receive advice on how to increase your chances of financing your franchise, for both franchisees and franchisors whether or not you qualify.

You can gain valuable knowledge and information from franchise articles, a guide to franchising, franchise news, and the franchise association. It’s always a good idea to keep an up-to-date franchise business plan, financial projections and any previous success stories you may have.

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