With traditional financing options becoming scarcer for new and expanding franchisees to obtain, franchisors are coming up with internal — and sometimes innovative — funding options.
This article from the Wall Street Journal discusses the lack of traditional funding and how franchisors are solving the problem.
- Edible Arrangements International Inc. has come up with their own financing division, named Farid Capital, to provide funding for new franchisees.
- Dunkin’ Donuts, among other franchisors, has reduced the royalties franchisees pay.
- Quiznos has started a new program in which franchisees pay a low down-payment (according to the article $5,000) and pays Quiznos 80% of their profits until the loan for the store has been paid off.
Interesting article. With SBA lenders still returning, it’s great that franchisors are providing other ways for potential franchisees to join their systems.
