Franchisees who own multiple units enjoy many advantages, such as spreading their fixed costs across more stores. If you are a franchisee looking to expand your portfolio, you will require financing to realize your growth goals. Having a sound, strategic growth plan and a track record of operational success can help owner-operators to secure the financing needed for expansion.
Here are three quick tips to consider for your financial plan:
Lenders need to understand why expanding makes sense. Will the market tolerate multi-unit expansion? Will expansion be profitable?
Talk to other multi-unit owners and they'll tell you to pick your finance partner carefully. A great partner becomes an extension of your company. They can help you to know which finance structures to deploy and when to use them.
You need to demonstrate your past successes and the expected impact of future growth on your company. While income statements and balance sheets show past successes, you'll use pro-forma financial statements to demonstrate your financial situation over the next several years as you add more stores.
When deciding to take on a larger portfolio, it is time to seek more structured financing. By working with a single, specialized partner, franchisees can be better assured that they will meet the capital requirements to fund their growth plan and achieve their long term plans.
For prospective operators who want a slice of the industry, there are expectations that go beyond menu items and counter service.
So you need financing for your restaurants? Beyond the broad economic conditions, multiple factors weigh into the lender's credit decision. Here are 7 to consider.