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Funding for B2B Franchisors


The B2B franchise space has a tendency to be high margin, attract top-notch franchisees with strong sales and/or executive backgrounds, and enjoys a long history of success.  Of course, as a franchisor in this space, you already know that. You also know the other side of the coin; that a service-based B2B franchisee can quickly get bogged down with receivables. What’s more, the more successful the franchisee is in the early days, the more they get tied to their AR, hampered by cash-flow, spending time on collections instead of selling, and likely becoming discouraged because their success is breeding frustrations instead of profits.

Sound familiar? Do you feel like you should bring a solution to your franchisees, but not sure what that solution is? Perhaps we can help!

Because we come from both the franchising and funding world, we both understand the frustration and understand the solution.

With the solution we bring to the table, we arrange for the funding, but it comes from you. By using a white-lable product it is you, the franchisor, who is bringing the solution. You are the one that is allowing your franchisees to grow instead of being shackled to AR. You are the one getting your franchisee past that growth wall and into the next stage of their business.

As a serendipitous benefit, all AR funds now run through you, to your franchisee, allowing you the chance to take your royalties, ad funds, and other fees prior to passing the remaining through. So not only are you eliminating a headache for your franchisees, you are eliminating one of the biggest headaches for franchisors!


If you are interested in learning more about this program, lets chat! reach out any time.

  • Franchise Return On Investment
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    How long does it take to see a return of investment as a franchisee?

How long does it take to see a return of investment as a franchisee?

How long does franchise ROI take?
People often ask me how long it takes to return your investment on a franchise. When discussing franchise ROI, there are really several separate questions. How long does it take to make a return of your investment, how long to make a return on your investment, and what is an acceptable ROI for a franchise model. Today, we are just looking at the first, but keep in mind all three of these are covered in the book How and Why to Franchise Your Business.

The amount of the investment
How you fund the business
The profitability of the business

Lets look at the last one first, to set a baseline. A good rule of thumb for ROI potential in a franchise is a minimum of 20% + equitable salary after two full years in business. To remove variables, we are going to assume that you are investing in a manager-ran business, so you don’t get the equitable salary piece, so now we are just working with the 20% number. So lets use 20% of full investment in year three and beyond as your profitability.

Next, lets look at the investment. Franchises can range from literally less than $10,000 to in excess of $10,000,000, but the vast majority of franchises range in the $100K-$1mil range, all-in. All-in means all costs to purchase the franchise rights, start the business, and keep it running until it is profitable. To narrow that down even more I would say that around 50% or more of franchises are between $200K-$750K. Lets use a nice round $400K for your investment. Now, based on the answer to question 1 (this paragraph) and question 3 (the last paragraph) we know […]

How to fund a franchise

How to fund a franchise
We have helped close to 2000 people invest in franchises. We have worked with franchisors that required an all-in investment under $50K, and have done multi-unit, are development, and master franchise licenses with investments in excess of $5million. An individual’s available capital, the amount of total capital needed, as well as their other assets, credit, business experience, etc., will influence what funding types they have available. However, there are four many ways to fund a franchise; all cash, retirement funds, SBA-backed loans, and private investment.

Each of these can impact the ROI of your franchise. If you are considering becoming a franchisor, your franchise consultant can help guide you to setting up your offering to be most attractive to lenders. If you are a considering becoming a franchisee, these are several of the ways to fund a franchise that may be available to you.
Fund a franchise with all cash
This is obvious, but it deserves a place on the list. I have worked with many investors who have funded this way. The advantages of funding a franchise all cash is that the business is not laden with debt or burdened with servicing, and you are not beholden to shareholders or fighting with partners.

Fund a franchise with retirement funds
People often don’t realize that, for many qualifying businesses, you can use retirement funds to fund the business. You are not withdrawing the money, but rather just self-directing it, so you don’t pay the penalties that you would for early cash-out. One of the great advantages of this method is that, if your business is more profitable than you need to sustain it and your lifestyle, you can push issue the profits back to the […]