In a recent Franchise Canada magazine article, author Karen Stevens writes: “After the initial excitement of learning about the multitude of franchise opportunities out there, it’s important to seriously consider all of the financial details so that you can sign on that dotted line with confidence.”
When buying a franchise, “among the myriad of questions to consider, how you’re going to finance your franchise is probably at the top of the list,” says Ms. Stevens. In her piece titled, “Know Your Options When it Comes to Getting a Loan to Start Your Business,” she focuses on four funding choices: 1) family members; 2) franchisors that provide loans to franchisees; 3) organizations that nurture entrepreneurship like Futurpreneur Canada; and, 4) Canadian government resources including its Canada Small Business Financing Program.
Holly Owens, director of franchise development for the Marketing & Print Division of Alliance Franchise Brands, recommends the article for would-be entrepreneurs, “because most people have never bought a business before and don’t understand what their options are.”
In her article, Ms. Stevens goes beyond the traditional borrowing from a bank, but it should not be overlooked when considering “all of the financial details.” “I typically start talking with franchise prospects fairly early on about making contact either with their local bank or going online and investigating what’s available,” says Holly.
“We’ve been in this industry for 40 years and have very good contacts with the Royal Bank of Canada and the Business Development Centre that’s mentioned in the article. We can refer them to the right people so they’re not going in blind. They’ll be talking with people who know what they’re doing and are familiar with our business.”
In the world of financing, the path to the dotted line isn’t always a straight line. That’s why it’s best to read up on your options and to talk to the experts.