1. Locate a Bank You Can Grow With
By James Short, director of food franchise finance, BBVA Compass
Our franchise-specific team exists as a vertical platform within the bank, which means when folks come to us looking for financing, we start off with a Small Business Administration program that will fund single components to independent franchisees. One of the toughest things for a franchisee is growing from 1 unit to multiple components, whether it’s two or more 10. But we can help them do that via our SBA program, and once they reach a certain size, we flip into a conventional loan, where we’ve got a little better availability to funding . So franchisees may have a complete life cycle within our own bank.
But we see plenty of owners come to us, and they’ve grown and grown but have never taken the time to collapse their capitalization construction. We’ve seen a 50-unit operator with 20 different credit facilities — that’s unbelievably stressful! We recommend falling that all into a single loan, taking advantage of embedded equity, and finding a bank that may offer a development line of credit that can be used for a multitude of jobs. We, by way of example, don’t require budgets, and we don’t require invoices: It is all true enterprise lending dependent on the value of the brand. Our franchise customers, they function restaurants — they’re not finance individuals. We all know what they need. If you go out of 20 credit arrangements to you personally, you receive so many efficiencies. Your life will be simpler, and you will save money, too.
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Two . Banking Benefits
From Bob McQuillan, VP of franchise growth, Hand & Stone Massage and Facial Spa
Hand & Stone functions over 400 spas in North America. As the company has evolved, its banking and lending needs have, also. The franchise-focused ApplePie Capital has supplied it with…
A. Personalized support.
“They move beyond your conventional creditor,” McQuillan states. “We actually have our own portal built within ApplePie’s site, so we can monitor all of our company’s deals — not just when a franchisee opens a first location, but as they develop to their second and third, too.”
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B. Franchisee outreach.
Hand & Stone’s franchisees work directly with ApplePie, which helps the franchise together with outreach. “They present at our discovery day meetings, in which prospective franchisees come to find out about the business,” McQuillan states.
C. Growth preparation.
As Hand & Stone has expanded from massages to skin care and waxing, shop sizes have grown considerably. “Existing franchisees have obtained over the space next door, in some cases,” he states. “As a creditor, ApplePie has helped us through those changes.”
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3. Unusual Success
By Josh York, founder and CEO, GymGuyz
What he expected: The founder of the 11-year-old fitness brand has had excellent goals from day one:”We are going to be the most significant fitness brand in the world.” In coping with both Capital One and Webster Bank, he desired partners who may help him plan to get a significant future.
What he got:York was amazed how lender service went beyond numbers. “We’ve done workouts at the banks, after hours,” he says. “Relationships are so significant. If I would not have someone over for dinner, I will not work with them”