Some military retirees have accumulated a significant amount of money over a long career and a government pension to fund their franchise endeavor. However, most people will have to rely on other sources of capital.
Borrowing money from friends or family is one of the simplest and most cost-effective methods. If that isn’t an option, look to secure a small business loan through a bank. Banks are more willing to lend money for franchises than start-up businesses.
“With good credit and good standing, my first choice would be a traditional bank loan,” Otte said. “In all cases, you need a strong business plan to prove you can pay back the loan.”
Otte said it may be necessary to shop different banks to find one that agrees to the loan.
“The most important part of any plan is the finance and marketing sections,” She said. “If you get those two sections down cold, you’re 90 percent along to having a good plan. The bank's main focus always is how they will be paid back.”