[nyskyline]

This might sound like a stupid question, but I was wondering when approaching a bank for a loan for a franchise business, what type, if any business plan would you submit? Isn't a franchise an already established business plan that has been successful, and the new franchisee is just operating the already proven plan?? I mean You could put location and demographics in the plan, and projected sales, previous related experience, but besides that everything is already established for the franchise such as adverising training etc. Thanks for any help.

[PRstore]

What banks and other financial partners will want to know is (1) who are your customers? and (2) how do you propose to convince them to shop with you?

When you're opening a franchise, even one with a nationally recognized franchisor, you need to show lenders that they're making a sound investment. Have you done a market analysis to demonstrate there is a need for your franchise? Does your location provide maximum traffic? What will you do to market to customers? Will you rely exclusively on franchisor advertising, or will you implement a local marketing plan? How much will you spend on local marketing? How will your local marketing plan integrate with and complement national or regional marketing?

These are just a few of the questions to consider.

[InsomnicBrain]

You should ask your franchise if they have any lenders you can work with. They usually refer you to someone who can make your business plan for you and everything else a lender requires. I am near the end of my loan process for a franchise.

Robert

[Tman0419TDV]

hmm. ill get back to you on that

[bizdev]

Originally Posted by PRstore

What banks and other financial partners will want to know is (1) who are your customers? and (2) how do you propose to convince them to shop with you?

Actually the three main questions a lender is going to ask is how do you plan to repay the loan, can you provide 20 - 30% of the cash requirements yourself and what is your experience in the industry you are going into?

To qualify for an SBA backed loan you must prove your experience. Even if you are able to provide the 30% cash and collateral, without experience it will be very difficult to obtain a loan.

A detailed, formal business plan showing all of the above, plus marketing, competition, financial statements and more, will still be required even for a franchise. Just because the franchisor was successful enough to offer their business model to franchisees, it doesn't automatically gaurantee the franchisee will be successful. A lender will require a full formal business plan from you too with all of your own particulars (local info relevant to your location).