We're going to continue on in a three-part series that will refer to the three Fs, which are fear, funding and familiarity. These are the three key things that are going to keep you from moving forward with acquiring a franchise. In the previous part, we covered fear, and here is link to check out that post. If you haven't read this post yet, you really should before or after you read this post.

The money, money, money, money. So a lot of people wonder when they come into looking at franchises when they go to the funding stage do I have to have a hundred percent of the money? And the answer to that is, no, you don't. There are some great funding opportunities out there. You do not necessarily need to have a hundred percent or even 50% for that matter, in most cases, to acquire a franchise if you are willing to look at some really great funding opportunities.

What does franchise funding entail?

You are very likely going to need and want money to fund the "business of your dreams" and it can seem a little bit overwhelming.  A great analogy to think about is to think of it like getting funding for a home. If you're going out to get your dream home, you're going to need funding and you want to get pre-qualified. The reason for that is if you're going to go out and buy a home, you kind of want to know what you're qualified for, right? There's no point in looking for something that's out of your budget and out of your realm. So use that same analogy when thinking of funding the business of your dreams with a franchise. 

So you need some money to acquire a franchise, but it doesn't all have to be in the bank because there are different aspects that you're going to need to fund. 

• You're going to need money upfront right away to pay your franchise fee 

• There might be a training fee 

• Maybe there's a build-out if you're doing a brick-and-mortar

• You're also going to want to have some money for your cash flow

• Money for marketing.

Some franchises can be cashflow positive from day one, but most of them are not. So you will likely need some time to get going. You're going to want some money to do your marketing, have about three months of cashflow in the bank to pay yourself or your employees as you're ramping up. 

Now we hopefully understand the likely need for at least some funding to acquire a franchise. 

What are some of the funding options out there available to a prospective franchisee looking to acquire a franchise?

It's good news, and it's bad news because there are so many funding options out there, so it can become completely overwhelming. We encourage our candidates to always work with a funding partner and we have some great resources that we can connect you with. We'll outlay some of the options here. Most of you have probably heard of the most common one, SBA (Small Business Administration). There are many different programs within the SBA that you can look at. Some other ones that maybe you weren't aware of would be H-E-L-O-C, which is taking money from your home equity.