Franchise financing can be used to launch a new franchise location, acquire an existing franchise, or expand operations. Lenders often evaluate the franchise brand strength, your experience, cash flow projections, and your ability to contribute capital. The best outcomes usually come from matching the right funding structure to the franchise’s total project costs and timeline.
Franchise financing is not one single loan product. It refers to a set of financing options used to fund franchise-related costs. Funding may come from term loans, SBA-backed programs (where eligible), equipment financing, lines of credit, or a combination depending on the franchise, borrower profile, and project budget.
“Many franchise projects require a “capital stack” multiple sources that cover different cost categories (fees, build-out, equipment, and working capital).”
Initial franchise fee and training costs
Real estate deposits and leasehold improvements
Equipment, furnishings, signage, and technology
Initial inventory and supplier setup
Grand opening marketing
Hiring and early payroll ramp-up
Working capital cushion for first months of operations
Acquisition costs for buying an existing franchise (situational)