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Finance

Access to capital is the lifeblood of franchise growth. Restricted lending policies of the past few years continue to be a challenge for franchisees, who need access to capital, whether to survive or expand. Lenders today are searching for solid franchisee organizations to do business with, but what exactly are they looking for? Learn what bankers, franchise lenders, private equity firms, and other capital sources want to see in a borrower - and make sure you are managing your organization in ways that make you attractive to lenders.

Learn more about the franchise finance and capital marketplace, and what factors are affecting your chances to borrow the capital you need to grow.

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Funding Growth: Deciding Whether To Use Debt Or Equity To Fund Your Growing Enterprise »

By Jenny Q. Ta

Loan financing and equity investment are two common methods of funding a new business start-up, assuming you do not have the capital on your own. Each strategy has advantages. The right choice depends on your short-term and long-term financial goals and personal preferences.
Debt financing is the better choice when you prefer to retain control of your operation, and you do not mind the tradeoff of greater risk for higher earning potential. However, if you would rather share the risk, mitigate debt obligations and bring in top-level experts, invite equity investors.
Ultimately, it will be up to you depending on your own situation.  As a seasoned entrepreneur, author, and CEO of Sqeeqee.com, the first-of-its-kind social "networthing" site, I have identified the following things to consider when making your decision...

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Retirement Planning: Knowing When It's OK To Play It Safe And When It's Not »

Multi-Unit Franchisee

As people get closer to the age when they hope to retire, traditional wisdom calls for moving into more conservative - safer - investments, such as Treasury bonds and many fixed-income mutual funds.
"The problem is, what is 'safe' for one person may not be 'safe' for another, given the amount of money in their portfolios, how their investments are allocated, and what their retirement lifestyle goals are," says financial advisor Haitham "Hutch" Ashoo, co-founder with advisor Chris Snyder of Pillar Wealth Management, LLC.
"Some investors believe Certificates of Deposit and U.S. Treasury bonds are safe investments because of their backing, but the income they generate is so low, they may not be safe in terms of producing the income you need for 30 years of retirement...

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7 Tips For Managing Your Banker »

By Steve LeFever

Banking basics for tough times
In these challenging times, it pays to be as prepared as possible. Here are some suggestions from the banker's side of the desk that will help increase your chances of success when it comes time to renew or renegotiate your current loan structure.
First, it's no secret that the banking industry has taken a hit over the past 48 months. Bank performance (or lack thereof) has been front-page news for some time. Here's an overview of what's happened, where we are, and what it means to you.
A generally robust economy since 2003 lulled banks into more of a "sales" mentality and less of a "credit analysis" mentality. As a result, credit standards were lowered, documentation pared down, and the loan decision process watered down...

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Implementing The Affordable Care Act »

By Benjamin Geyerhahn

What franchisees need to know about the ACA rollout

The Affordable Care Act (ACA) has introduced widespread changes to the healthcare landscape. It has increased the availability, quality, and affordability of health insurance for the general population, regardless of age, gender, or pre-existing medical conditions.
The ACA has also altered the guidelines for employer-sponsored insurance, which has thrown many small- and mid-sized businesses for a loop.
In 2015, the ACA employer mandate will require employers with 50 or more full-time employees (defined as an average of 30-plus hours per week) to offer a minimum coverage health plan at affordable rates (less than 9.5 percent of an employee's household income).
Additionally, companies with 200 or more employees are required to automatically enroll employees in employer-sponsored insurance with a waiting period of no more than 90 days...

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Fair Wage War: IFA Takes Its Minimum Wage Battle To Chicago »

Multi-Unit Franchisee

Fast on the heels of its recent legal challenge to a new minimum wage law passed in Seattle, the International Franchise Association (IFA) has now set its sights on the city of Chicago.
Steve Caldeira, president and CEO of the IFA, wrote a letter to the Chicago City Council and Mayor Rahm Emanuel last week urging them to remove a provision in a bill to raise the minimum wage that would discriminate against franchisees.
Caldeira and the IFA have been clear in their assertion that franchisees are locally owned, small businesses and not large, national businesses as the legislation suggests. Giving non-franchise small businesses extra time to increase their wages, but forcing franchisees to raise their wages along with large companies is unfair and unconstitutional, says Caldeira...

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Hunting For Funding: How Alternative Lending Can Boost Your Business »

By David Goldin

If you've had issues financing your franchise, you're not alone. Like any business owner, you need money to take care of everyday costs like paying property taxes, meeting payroll, or purchasing inventory and equipment. But what happens when you walk into a bank and are denied funding because of a low credit score or insufficient collateral?
This is a problem all too common for business owners these days. Following the recession of 2008-2010, government regulations forced banks and other lenders to significantly tighten their requirements. These restrictions effectively shut out many businesses from acquiring funding.
So what can franchisees do to receive the funding they want? The answer lies within alternative lending.
Since the financial crisis, alternative lending companies have begun to take the place of more traditional lending options...

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Emotional Investing: Keeping Your Emotions From Dictating Your Financial Future »

Multi-Unit Franchisee

You've probably heard of emotional eating, but financial advisor Matthew T. Shafer says emotional investing is a problem that needs to be recognized society-wide, especially since the economy has been in such sharp focus this past half decade.
"The words of an experienced mentor have proven to be spot on throughout my career; he said that no matter how smart they are, most people don't know what to do with their money," says Shafer, named one of the top 1,000 financial advisors in the U.S. by Barron's Magazine.
"It wasn't that people were ignorant, and it wasn't that they were incapable of analyzing investment opportunities. The challenge occurred when emotion clouded their judgment."
People become too optimistic and enthusiastic when their investments are on the rise, and too fearful and skeptical when they see a decline, he says...

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The Profit Mastery Road Map: Improve Your Profitability And Cash Flow »

By Steve LeFever

Mysteries are solved when we use clues to find the culprits behind the crime. Financially speaking, when the crime results in the untimely demise of a business, we often see three usual suspects: low cash, low gross margin, and low net margin.
But low cash and low margins are caused by something. The diagram presents a big picture overview, but also can lead us through a clue-by-clue, cause-and-effect deductive analysis designed to pinpoint potential financial culprits. When combined with industry benchmarks, this diagram can become your personal roadmap to success.
First, how to read it. Between any two boxes, in the direction of the arrows, insert the word "causes." In other words, "low cash" causes "high borrowing." Now, if you work against the arrows, include the words "is caused by" between the two boxes...


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Issue II, 2016

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