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Will a franchisor assist in finding finance for a franchisee?
They certainly will, and all well-structured franchises have close relationships with the major banks that have specialist franchise sections. Historically the banks have been very supportive of franchising, often offering better terms than they would to an independent start-up, because they perceive franchisees to be far safer lending propositions. Of course, in the current financial climate things have changed. Although the banks claim ‘business as usual’, many franchisors are experiencing delays in approvals, a requirement for greater levels of security and requests for a more robust, demonstrable business plan than has perhaps been the case in the past. None of that is necessarily a bad thing, despite the temporary inconvenience that it may cause, because it should lead to a more considered entry into a franchise relationship for both franchisee and franchisor. Proper financial planning will lead to even safer, and more successful, franchise lending in the future. Banks may choose to stop supporting some franchisors, but there will usually be a good reason for that, which will make franchisees think more carefully about which system to join.
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