How to Start a Franchise With No Money Down

Interested in small franchises but don’t have enough capital? If YES, here is how to franchise a business with no money down.

How To Open A Franchise With No Money Down

Franchising, as a business model, has enjoyed tremendous success in its operation and efficiency, across many parts of the world.

Global businesses and conglomerates like MacDonald’s, Subway, and Mr. Clean Car Wash are just a few of many businesses that are successfully implementing franchising in expanding their operations globally.

In very rudimentary terms, franchising does require that the potential franchisee parts with certain payments, dues, and royalties, to be eligible to enjoy the benefits that come with running a franchise.

However, the applicant for a franchise, if cash strapped, need not jettison the dream of owning a franchise. If the saying- ‘When there is a will, there is a way’, still has any relevance, then the potential franchisee can embrace pragmatism and think up innovative ways of financing a franchise.

How To Own A Franchise With No Money Down

Find a Business Partner

This route has always been taken by a lot of business-minded individuals. Workaround not having insufficient capital by entering into a partnership with another individual or investor. This can be a desirable option if one knows someone who might be interested in ownership and has the financial clout but does not have the expertise required to run the business successfully.

With a detailed business plan backed up by you can providing the experience and operational support to run a profitable venture, you could get someone else to take care of the financial outlay. What will be required is a mutually acceptable agreement term that shares the ensuing profits based on equity contributions of both partners.

Friends and Family

It is said that charity begins at the homestead. Always remember relatives, family members, and friends! As is often the case, the financing for a new franchise can be sourced from individuals close to and around you.

These are people who believe in your dream and aspirations and are willing to make available the money need to kick-start the franchise business, usually without interest or the pressure to pay back the loan in a good time. A good number of the more popular global business brands started from the seed financing obtained from close friends and family.

Seller Financing

In some instances, the existing owner might be open to financing a portion of the transaction where monthly payments are made directly to the previous owner. This route can also be explored in acquiring a franchise without any payment made. More often than not, the seller of the franchise will need to be convinced that the new owner has the drive and determination to make a success of the franchise.

Private Small Business Lenders

If all options have been explored and one still can’t come up with the funds needed to start the franchise/ business, private financing companies or a peer to peer lending groups can be a last resort. Also referred to as Angel Investors, these sources can provide the financial wherewithal to kick start the franchise.

What these categories of investors require is a detailed and thoroughly set-out business plan, showing potential revenue earnings and projected plans for expansion and growth. Several online websites are places to start searching for investors like this.

These companies are approached by thousands of hopeful entrepreneurs and startups every year. The selection process is usually competitive, as only the best ideas are chosen for investment.

Business Grant Opportunities

Governments and certain NGOs, periodically, make available grants and supports, to enable franchise/ventures get off the ground. The main attraction of grants such as these is that there are usually no repayments required.

However, the franchise or business will have to submit to close supervision and scrutiny, to ensure the judicious use of the funds granted. Usually, these funds are given to targeted areas of a business endeavor like establishing solar power mills or starting farming groups to empower women.

Reaching Your Goal

While owning your own restaurant business or franchise can be tasking, it can also bestow a sense of pride and fulfillment when the business gets off the ground and is running. The hopeful franchisee must keep seeking opportunities and openings that offer the best means of acquiring a franchise.

Hence persistence and determination are essential. If one continues to push towards the objective of being able to buy a franchise, success will likely greet such efforts.

However, If there is difficulty in selling that business idea across a spectrum of funding options, one can consider the possibility of fine-tuning the proposal or seeking another business entirely. Investors are impassioned and are only moved by positive numbers that will ensure a good return on investment.

If your franchise idea meets these criteria, then it stands a good chance of getting off the ground with the financing it needs.