Industry Insights: Franchise Financing

If you’ve ever wanted to learn more about getting involved in franchising, Gretchen Blake is the person to ask. As Business Development Director for IRH Capital, a division of GreatAmerica Financial, she has an extensive understanding of both franchising and financing. Gretchen not only has 20+ years' experience in franchise financing, but she has been with IRH Capital since its inception in 2002. Read on as Gretchen shares her expertise on the process of becoming a franchisee, why financing your franchise purchase helps you, and why it is so important to have a knowledgeable partner when choosing a franchise financer.  

How to buy a franchise?  

Franchises are everywhere and you may be interested in learning more about the process if you are reading this. A common starting place for some might be to search, “How do you buy a franchise?” Short answer, you don’t. Essentially, you are leasing the name and brand recognition from a corporate office, and it comes with a lot of upfront costs. There is building or acquiring a location for the business, all the necessary equipment (often proprietary to each franchise), branding both internal and external, and franchise fees. However, all the assets previously listed can be financed as well as the following:  

• Working capital loans 
• Acquisition Loans  
• Franchise fees 
• Working capital 
• Franchise Licensing 

When becoming a franchisee, instead of thinking about "buying" a franchise, consider financing the starting costs and making payments while earning from your franchise.

Why choose franchise financing?  

Franchise financing is specifically designed to meet the needs of franchise owners. It often involves specialized loan programs that consider unique franchise factors such as brand recognition, franchisee experience, and the specific requirements of the franchise.  

There is no fear of working with big banks because when you choose to finance your franchise, you can work with specialized financial institutions that know how to work in the industry. Franchise financing lenders consider factors such as the franchise’s brand reputation and success rate, the borrower's credit history and financial stability, the amount of capital needed, and the borrower's experience in the industry. Even after the initial conversations, a strong franchise finance partner can continually support a franchisee's ownership.  

Franchise financing can provide existing franchise owners with the capital they need to open additional locations, renovate existing ones, upgrade to new equipment, or invest in marketing and advertising efforts to grow their business.  

Why work with IRH Capital?  

IRH Capital has 20-plus years of experience in franchise financing and brings every year of experience to any partner they work with. IRH Capital can offer several benefits, including expedited approval processes, competitive interest rates, flexible repayment terms, and access to industry-specific expertise and resources.  

Securing franchise financing plays a pivotal role in fueling growth, enhancing operational efficiency, and ensuring the long-term viability of a franchise business. Whether funding for expansion initiatives, equipment upgrades, marketing efforts, or working capital needs, having access to adequate financing enables franchise owners to capitalize on opportunities and navigate challenges, ultimately positioning their franchise for success in the competitive market landscape. That is why it is so important to establish a partnership with a trusted finance provider. Interested in financing your franchise purchase? Get in touch.