Short answer: Absolutely!
Start-up restaurants and fast food franchises are a highly popular enterprise for new entrepreneurs, yet it can also be one of the most expensive. Figures can range from the tens of thousands and on up to seven-figure digits depending upon what type of operation you choose (smaller fast food, drive-thru franchise vs. full-size, sit-down fine dining restaurant) and how built up (or not) your location already is.
However, whichever fast food franchise and location you choose, it’s likely you won’t have all of the cash you need to succeed up front and already in the bank. Not only is that OK, it’s perfectly normal!
Most new business owners will require some additional funding. Thankfully, there’s a whole host of borrowing options, including restaurant-specific loans, available to you, whether you’re first starting up or are in need of along-the-way cash.
Initial startup costs tend to be the most expensive, but they likely won’t be the only time you’ll seek outside financial assistance. New fast food franchises should expect to throw a ton of cash at new equipment, staff training, licensing and other related fees. Working with a good franchisor can help keep many of these start-up costs to a minimum.
But remember that this won’t be the last time you’ll likely need to consider a restaurant loan. Be prepared for slower seasons to occur, during which you’ll need the necessary funds on hand to cover staffing costs.
Or perhaps you’re in a sudden upswing and need to remodel the restaurant or hire a more experienced managing chef. There’s also advertising and marketing costs that are ongoing and essential to the success of your businesses.
Restaurant and fast food financing offers you that working capital your business will need, when you need it, to enable you to be successful and competitive.
The following is a breakdown of some of the more common options for the owners of fast food franchises who are looking to fund a new or existing location.
Banks also tend to be skeptical of first-time business owners, which is why going into the bank with a franchise proposition can give you a big advantage, since successful franchises are the best proof of concepts.
That’s because while the SBA — the U.S. Small Business Administration — doesn’t offer direct loans to businesses, they will guarantee any loans made by private and public financial institutions. This offers risk-averse banks and credit unions the assurance they need to provide you with the cash you need.
Finding the right funding for your restaurant is important, which means that you need to ponder your choices and make an informed decision. However, investing in an established and low-cost fast food franchise like Pretzelmaker will surely give you an advantage in getting the right loan for your franchise. For more information about finding the right financing for fast food franchises, or to learn more about franchising with Pretzelmaker, contact us today.