When looking to buy a franchise you need to establish how much money you can afford to invest into a franchise business. You need to look at savings you have, money you can borrow from family and friends, and also what you can get from a bank. You need to also make sure that you know how much money you also need to live on e.g. pay bills etc, as you will need to take this into account when calculating how much you can afford. By knowing how much money you can afford to invest in a franchise, you will be able to come to short list of franchises that fall into your price range.
Make sure when looking at a franchise opportunity ask for a full breakdown of costs, including working capital. There is no point in being able to afford a franchise if you are not able to afford day to day running of the business.
Banks like franchising. Because of the nature of franchising, you are buying a tried and tested business format, franchising is a lot safer than starting a business from scratch. And banks like this fact! Banks will lend according to the franchise and so it is useful to approach banks to ask them how much they would be willing to lend on a particular franchise, this can be an excellent indicator as to how well the franchise is rated.
In this section we look at how to raise finance for a franchise, the franchise costs, creating a business plan and approaching banks for finance. You can ask any finance questions you have to our panel of finance experts.