Log In / Register | Feb 9, 2012

How to Raise Capital For Your Franchise

 The money you need is out there. You just have to know where to look.

Of all the mistakes new business owners make, the most fatal is failing to anticipate the cost of getting and staying in business. When you begin to explore franchising, you quickly discover that one of its benefits is having franchisors who can help you avoid this common error.

The rules that govern franchisors require them to provide you with a disclosure document outlining, in addition to other information, the details of your initial investment. With a history of new franchise openings and knowledge of how the business typically operates during its initial period, mature franchisors can estimate not only the cost of establishing the business, but also the working capital you’ll need.

Buying a Franchise

 It is impossible to drive down any Main Street in America today without passing a franchised business. Franchising has grown so rapidly since the end of World War II that by the end of this decade over 50 percent of every retail dollar spent in the United States will be from an automobile, beverage, hamburger, dry cleaning or one of the other 65 industries which make up the franchised marketplace. Internationally, franchising has become one of the great intangible exports for the United States. Franchisors have penetrated the iron curtain with a long list of industries including restaurants, retail and service providers.

Determining If A Franchiser Understands Franchising

 Companies offering world-class products and services frequently contact MSA looking to become franchisors. They may only have developed a loyal customer base in their local market or they may be a member of the Fortune 500 whose brand is a household name. Regardless of their size and reputation, at MSA we believe it is essential to first examine the company’s underlying business before we help them become a franchisor. During a feasibility examination we measure the client's company against criteria we use in determining franchiseability. The simple concept of measuring a business against recognized standards is one of the most essential services we provide to emerging franchisors.