Small Franchise Funding

ronkimmonsronkimmons subscriber Posts: 1
edited January 2014 in Startup Funding
Hi all. I am an MBA student - set to graduate in August - and I have been talking to a business roundtable franchisor called CEO Focus. I like this business model a lot, and I feel that I would be very good as a CEO Focus franchisee/facilitator. Some of the things I like about the business model are:

Overhead is minimal. There is no need for inventory, employees, or office space.
Income is steady. Clients continue to pay on a monthly basis, and client turnover tends to be low.
This type of business is not very susceptible to market fluctuations.
Net earnings, before tax, can quickly reach $300,000 per year. (But that's where earnings plateau.)

However, as you may expect, it does cost money. The franchise fee is $25,000, and I estimate another $35,000 on top of that to cover initial marketing expenses and some miscellaneous expenses. But here's the problem: being a full-time student, I'm already saddled with a lot of debt, and I can't show a lender any steady income. So a bank loan is out of the question. As for equity investment, the income plateau and lack of scalability makes that less than ideal. So...what should I do? Are there any other funding options out there that I am missing?

Comments

  • ronkimmonsronkimmons subscriber Posts: 1
    I appreciate the responses.
    joehaffey: This is a service-based franchise, but it is neither telecom nor financial services. As for network financing, I assume you mean finding angel investors, etc., right? Yes, at the moment, I feel that this is my only option. One of the problems that I face is that I am not looking to sell equity, but to raise debt financing. As there is a revenue ceiling here, equity financing would not make much sense for either party.
    robertj: As I am just now purchasing this franchise, and as I do not currently run one, I do not have any income streams to speak of. This is one of my problems. I suppose I can try to talk to a lender face-to-face, but if my online research is indicative of what I will find, I think I would just be wasting everyone's time.
    ashleybrown: If I understand correctly, merchant cash advances are based upon past revenues from credit/debit purchases. As I am not yet in this business, I can provide no such evidence of revenues.
    What I would like to do is raise $60,000 in debt financing under the agreement that I will repay $35,000 at the end of each year for the next three years, with the ability to pay off the debt early at a reasonable discount. Could anyone give me some ideas about how I could pitch this to potential investors - and how to find them?
  • LindaKingLindaKing subscriber Posts: 0
    Ron - First, congratulations on the degree!
    Have you discussed with close friends/family or Crowdsourcing for this?
    We work with a firm that specifically assists Start-ups and small business owners and may be able to help.
    Feel free to connect or visit our site - lk
  • Joseph121Joseph121 subscriber Posts: 6
    You can contact some good venture capital firms. They not only helps you in finance as well as also help you in building your market and reputation in the global market which is very important for thestartups otherwise it'd be quite tought to handle the business after a few years or even months.
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