USA E2 Visa Franchises: What are the Requirements for an E2 Visa?

If you are a foreign business owner or investor, an E2 visa can offer a smooth path to temporary residency in the United States. It is important to point out that the E2 is a non-immigrant visa; meaning it does not provide a direct pathway to permanent residency in the U.S. That said, E2 visas are issued for a period of two to five years with unlimited renewals as long as you continue to meet the requirements.

One of the best ways to come to the United States as a business owner or investor is through a USA E2 visa franchise. Franchises offer several advantages over businesses you may start from scratch, including:

  • A proven business model;

  • A replicable business plan that will fulfill one of the major E2 requirements;

  • A recognizable brand name that will increase your chances of an E2 approval;

  • Detailed training from an established brand with a vested interest in your success.

In short, established franchise brands offer foreign investors the best chances for not only E2 visa approval, but for long-term success once you establish your business in America. Of course, nothing is guaranteed and you still need to put in the work, but if you follow the proven business plan, there is a good chance you will be able to continually renew your visa and remain in the United States indefinitely.

USA E2 Visa Franchise Requirements

In order to be approved for an E2 visa, you must first originate from one of the 80 or so E Treaty countries. Among the countries that qualify for an E2 franchise visa include Mexico, Costa Rica, Honduras, Jordan, Iran, South Korea, The Philippines and many others. Some notable exceptions that are not on the list include China, Russia and Israel. Assuming you are from an approved country, there are several other requirements you need to meet, including

You must have a “substantial” amount to invest in a U.S.-based business

While there is no set amount required by the U.S. government, experience dictates that by “substantial”, they typically mean at least $100,000 USD to $150,000 USD. So it is safe to assume that you should be investing $100,000 USD at a minimum.

You must be investing in at least 50% of the business enterprise

This is pretty straightforward; your investment needs to be enough to purchase a minimum of 50% of the business or franchise you are investing in.

You must be able to document that you obtained your funds legally

Though some of your money may come from family either in your home country or abroad, you must be able to provide documentation that your investment capital was obtained legally.

The business you are investing in must NOT be a “marginal” enterprise

By “marginal”, they mean a business that is sketchy such as a multi-level marketing group or an unproven startup. This is why USA franchises are a perfect fit for those who want approval for an E2 visa; franchises are real, proven and known to USCIS officers, so they are not likely to be considered marginal.

What about Moving to the United States?

When many foreign national hear about the E2 business opportunity, they are initially excited – wow, this is our chance to come and live in America, and all we have to do is have the money to substantially invest in a real business! But then reality sets in; where in the U.S. are we going to live? What about moving expenses, housing, etc.? What about our family here at home?

With any international move, there are several issues like these to address. As far as moving expenses and housing go, it is strongly recommended that you have at least an additional $50,000 USD (on top of your franchise investment) to cover airline tickets, housing and living expenses for several months while your new business gets up and running.

Cost of living will vary depending on the part of the country you move to. If you choose to move to a large city such as New York, Los Angeles, Chicago or San Francisco, housing is much more expensive than living in a lower population area such as Reno, Nevada. You will also want to consider climate; if you are used to warm weather, you may not want to move to Minnesota or the East Coast. Southern California, Texas or Florida may be better options.

As for your family, you are allowed to bring your spouse and children under age 21 on an E2 visa. Your spouse may obtain employment authorization while living here and your children may study here. Once your children turn 21, however, their visas will expire and they will need to adjust their status to remain in the U.S. legally. Of course, if your business is expanding, your children could always invest in a new franchise location to remain in the country legally.

What Type of USA E2 Visa Franchise Should I Invest In?

There are literally hundreds of franchise business opportunities across a wide range of industries, many of which would easily qualify for an E2 investor visa. Since indefinite residence in the United States is directly tied to the success of the business you invest in, you need to find the franchise opportunity that best fits your passion, skills and budget. Rather than deal with hundreds of franchise recruiters trying to sell you on their particular brand, the most efficient path is to work with a franchise broker.

At Franchise City, we provide free unlimited consulting for foreign nationals interested in an E2 visa franchise. Through a proven multi-step process, we help clients narrow down their choices to the franchise brands that give them the best chance at success. Our services are low pressure and completely free – you can take all the time you need to decide which business is right for you. To begin taking advantage of our services, fill out the form at the bottom of this page.

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Fitness Franchise Opportunities: A Lucrative Industry for the Right Individuals

Are you possessed of both a business-oriented mind and a health-oriented heart? If you’re the kind of person who is passionate about helping people improve their health, reduce their stress levels, and live longer, healthier lives, you’re halfway there. If you’re also the kind of person who loves watching your money grow and your business expand, there are a wealth of lucrative health and fitness franchise opportunities for you to choose from.

Fitness Is Big Money

Fitness franchise opportunities come in an enormous variety. For the past several years, the leading success stories have been lean, low-staff operations that offer a wide variety of generic services (AnyTime Fitness, Snap Fitness, Planet Fitness), and specialty operations that focus on a single core audience (Curves) or a single core service (Hot Yoga). The fitness market is so robust that even highly-specific franchises can succeed in the right communities.

Why Franchise When You Could Start Your Own Business?

Simply put, while fitness is a big market, it’s also one that’s rather full of what might politely be called “snake oil.” There are an enormous amount of fitness concepts out there that are less than legitimate, and people have generally been exposed to enough ill-conceived health and fitness concepts that they’re a little leery. That means the brand recognition that comes with an already-successful, pre-marketed concept is often the difference between having your startup derided and having your franchise become highly successful.

Why Fitness When You Could Franchise Into Any Other Industry?

Ideally, as a franchisee, you’re looking for an area you already have a passion for. If you’re the kind of person who keeps up on the latest news on nutrition, martial arts, sports training, or any other fitness-related topic, fitness can be your opportunity to pivot that passion from a hobby to your living. If you’re more interested in what kinds of fantastic flavors you can pack onto a sandwich, there are plenty of those franchises out there as well. You should be picking your franchise because of your passion, not in spite of it.

What Are the Pros and Cons of Fitness Franchising?

  • Con – It Requires Obedience: Any franchise you get into is going to necessitate following a strict business plan — deviate more than is allowed, and you could have your franchise contract rescinded.
  • Con – Fitness is a Volatile Industry: Some fitness concepts, like yoga and high-intensity interval training, take off like wildfire. Others, like tae-bo and step aerobics…not so much.
  • Pro – The Market is Endless: In a country where two-thirds of the adult population is at least ‘moderately overweight’ or worse and even the senior citizens are ever-increasingly-obsessed with looking and feeling ‘right,’ there’s never a dry well in the fitness industry.
  • Pro – It Can Be a Relatively Hands-Off Business: No franchise is ever “set it and forget it,” but a fitness franchise can, if you hire carefully and budget well, be the kind of business that you don’t need to be present every day — or even most days. Especially once you reach the break-even point, hiring managers that can handle the day-to-day and let you focus on the big picture is relatively easy.

Is a fitness franchise right for you? And if so, which one? You may have a pretty good idea if you can answer “yes” to the first question. But once you know you want to get into a fitness franchise, there are literally hundreds of concepts out there to choose from. To receive an objective assessment of your available opportunities, it is wise to work with a franchise consultant. Franchise consultants have work with hundreds of the top brands in fitness and a wide range of other industries. Through a unique and proven consulting process, they can help you decide which franchise is right for you.

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Sales-Based Franchises: Cashing in on the B2B Sector

If you’re a disillusioned senior salesperson looking for a future that isn’t attached to a company whose success is beyond your control, you might think that your only option is a full career change. But before you dust off your expired commercial driver’s license, consider the potential of starting a sales-based franchise.

What is a Sales-Based Franchise?

Simply put, a sales-based franchise is the classy, corporate ideal of a business-to-business senior salesperson merged flawlessly with the 1950s ideal of the self-made door-to-door salesman through the magic of franchising. In a sales-based franchise, you work for yourself, as owner and (often sole) employee of a franchise built around your ability to sell products to businesses.

Some sales-based franchises are attached to a particular product line; others offer products from several different manufacturers within the same industry. This new brand of ‘hybrid sales’ has proven extremely effective in a variety of markets, including:

The Hybrid Sales Model vs. The Old ‘Employee/Contractor’ Dichotomy

You might be looking at this and thinking “wait, doesn’t this just mean I’m a salesman for the company, but I’m not an employee in this scenario? How is this any different from being an independent contractor?” It’s very different, and it’s very different almost entirely in your favor. Here’s why: as a franchisee, you have a lot of benefits an independent contractor doesn’t, including…

  • Independent Direction: Independent contractors are often micromanaged even more harshly than standard employees. As a franchisee, you’ll have a business plan to follow, but the day-to-day operations and your activity under them are entirely your own to decide.
  • A Guaranteed Job: An independent contractor can be severed at any time by the parent company. As a franchisee, you sign a contract that ensures you cannot be ‘fired’ for the duration of the franchisor-franchisee relationship. This contract is typically renewed regularly as long as it is satisfactory to both parties.
  • Ownership: If and when you do sever your relationship with your franchisor, you will have an asset you own, clientele you have built and the ability to potentially sell it for a large sum of cash. Unlike an independent contractor that generally walks away with nothing, you are able to enjoy the fruits of your labor even after you leave the company.

A Word of Warning!

There absolutely are some businesses out there that are using the ‘franchised salesman’ model strictly to hire a sales force that they don’t have to provide with benefits, insurance, and other perks of traditional employment. Before you sign up to become a sales franchisee, you need to examine the franchising contract very carefully with two questions in mind:

  1. Does my franchise exist apart from its relationship with the franchisor (i.e. if the franchisor went out of business, could you continue operating by, for example, finding another vendor to sell the product or service)?
  2. Do I control what will be done and how it will be done, with the franchisor only directing the result of what I’m doing?

If your franchise is 100% dependent on the existence of your franchisor, or if the franchisor actively directs the daily activities of the business, you’re not actually a franchise — no matter what the contract (and royalty check stubs) say. Not every sales-based franchise you can get into will fall into this category, but we would be remiss to not mention that they exist.

Those few unscrupulous pseudo-franchisors aside, the sales-based franchise sector is young, vibrant and growing fast; if you have the sales experience and the chops to bring in the big bucks under no one’s supervision but your own, this is one of the best franchise business opportunities for the 21st Century.

Whether you’re searching for a sales-based franchise or a franchise opportunity in a different industry, there are hundreds of brands and business models to choose from. Going directly through each company, you will end up dealing with numerous franchise recruiters all trying to sell you on the benefits of partnering with their brand. A better way to find your ideal business is to work with a franchise broker.

At Franchise City, we provide unlimited complimentary franchise consulting as well as a unique, proven 20 step process to help clients find the business that best fits their passion, skills and budget. And the best part; the franchise fee is exactly the same whether you work with a broker or go directly through the company recruiter. For further information about sales-based franchise opportunities, contact us filling out the form on the bottom of this page.

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Are You Right for a Home Healthcare Franchise?

There are few business opportunities that are as opportune as home healthcare is at this particular point in history. The Baby Boomers are averaging nearly 60 years of age right now, and every passing year places more and more of them into a position of needing regular, if not continuous, health care. For the right people, a home healthcare franchise is a nearly ideal business — the question to ask yourself is: are you one of ‘the right people’?

The Qualities of a Great Home Healthcare Franchisee

In order to succeed as the owner of a home healthcare franchise, you need to start with all of the basic qualifications of a good generic franchisee. Those include:

  • No Ego: You have to be willing to follow the system even if you think your own ideas are better. Remember, the best reason to buy a franchise instead of starting your business is to have a system that will keep you from making mistakes. Stubborn, willful types may struggle with this idea.
  • Social Skills: Franchising is a combination of marketing, relationship building, continuous communication with the franchisor and other franchisees, and constant communication with your employees and customers. If you don’t have top-tier social savvy, you’ll have to have a lot of dedication and perseverance to make it.
  • Financial Ability: If you don’t have a good sense of money — of how to structure a deal to improve your ROI, how to keep your expenses down, how to hire people that will make you money, and how to balance the need for profit with the longer-term picture, you won’t make it in any franchise.

But those are just the generic qualifications — you also need a special set of skills to be able to succeed in a home healthcare franchise in particular. In particular, you need to have:

  • Hiring Skills: Healthcare isn’t a business that can survive if your caretakers aren’t exceptional. It’s better — far better — to spend a month of interviewing and declining poor caretakers than it is to get to business a month earlier and end up having to replace a string of poor caretakers down the road.
  • Empathy: Somewhat akin to being a landlord or a debt collector, the most effective home healthcare franchise owners are those who are able to put themselves in their clients’ shoes. You will have occasions when a client can’t pay you on time because of their fixed income, or where they will need special accommodations in order to use your services for some period of time. Being able to see those situations from their perspective and adapt to enable everyone to get what they need is a crucial ability for a caregiving business.

If you can follow a system, reach out to your community, deal with money, find the right people, and genuinely feel your clients’ pain when they hit an unexpected obstacle, you’re ready for a home healthcare franchise. The next challenge is finding a franchisor that is ready for you. There are literally dozens of companies in the senior care business, and most are rapidly growing in most areas. To find the right one to fit your skills, passion and budget, it is best to work with an experienced franchise broker. Unlike company recruiters, franchise brokers have access to several of the top franchise opportunities in your area, and can give you objective guidance in finding your ideal business.

 

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Home Inspection Franchises: A Lucrative Opportunity to Serve the Real Estate Industry

When it comes to starting a franchise, in many ways, timing is everything. If you can hit a market right as it’s starting to blossom, you can push through the difficult part — between startup and the break-even point to where you start actually making money. As it happens, the rental market in the US is so horribly overpriced right now that the housing market is starting to pick up just by virtue of the fact that mortgages are actually cheaper than rent for most decent-credit-score folks. That means that businesses that service home buyers — like home inspection franchises — are a strong bet right now.

Advantages of a Home Inspection Franchise

What makes a home inspection franchise better than any other franchises you might choose? Let’s get into some details:

  • Mandated Business: Home inspections are completed in 95% of real estate transactions, in many cases because an inspection is required by ordinance or law.
  • Low Overhead: Home inspectors do their business over the phone, via email, and at other people’s houses — which means no overhead from renting a storefront, no loss of time and gas money from an everyday commute (among other benefits).
  • Control Your Schedule: Scheduling home inspections is a matter of balancing your schedule with the client’s schedule, but generally speaking there’s plenty of flexibility to be had. Unlike with most jobs — franchise and otherwise — you’ll rarely have to miss out on an important personal event because you can’t get away from work.
  • Control Your Income (Somewhat): On the other side of the same coin, it’s not uncommon for a busy, tightly-scheduled home inspector to break six figures annually. Especially if you live in a busy area, making serious money is a strong possibility.

What Do I Need to Be a Successful Home Inspector?

If you want to be a successful home inspection franchise owner, you need to have all of the skills that a general franchisee needs — specifically, the ability to:

  • Follow a Plan: This is perhaps the single most important thing for any franchisee — if you can’t just buckle down and stick to a plan (even when you think your ideas are better), owning a franchise will be a challenge.
  • Reach out and Connect: Every franchisee needs to be able to give and receive feedback from their franchisor — but they also need to be able to reach out to their peers, share stories and best practices, and rely on their training and support staff.
  • Control Your Money: Following the plan can help you succeed at your business, but if you can’t manage your money carefully, keeping your future expenses in mind and balancing them against your supply of ready cash, you may have trouble making it to your breakeven point.

But beyond that, a home inspection franchisee will also need a set of skills unique to this industry, including:

  • An Eye for Details: Home inspection is a science, not an art. And as such, it requires a keen sense of observation.
  • A Good Memory: Home inspectors have to know a lot of details about everything in a home, and they have to be able to recall them on the fly.
  • The Ability to Market your Services: Even with a strong growth trajectory, you still need to be able to make yourself known to the community of business people most likely to hire a home inspector – real estate agents. This will require the ability to network with such professionals.

Home inspection franchises are growing in popularity, and many new owners achieve success in a relatively short period of time. However, this industry is not for everyone. If you want to find out more, the best place to start is to speak with a franchise consultant with access to several home inspection business opportunities as well as numerous other industries. A franchise consultant can help you find the ideal match for your passion, skills, and budget without having to deal with high pressure recruiters from each franchise brand. To learn more about what a franchise broker can do for you, fill out the form at the bottom of this page.

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Light Up Your Community with a Home Care Assistance Franchise

The economy is finally recovering even for those of us who aren’t in the top few percentage of income earners, and with it comes an option that those of us that have a business spirit haven’t had for some time; the option to choose something that is fulfilling as well as profitable to do with our time. Franchising isn’t often considered a fulfilling pastime, but that’s because of the poor reputation that certain sectors (food mostly) have given the entire concept.

What If Everyone Loved You Instead?

What if, instead of being the 4th Subway (or 2nd Quizno’s) in your city, you started a franchise that everyone loved to have around? What if, instead of being a frazzled franchisee trying to force yourself to work in an unrewarding but potentially profitable industry, you were busy doing work that you found emotionally fulfilling? Welcome to the world of the home care assistance franchises. Even if you don’t provide any amount of medical care, and all you do is offer housekeeping, cooking, transportation, or other relevant assistance, you’ll find that your clients (and their families) are happy for your services.

Don’t Be a Stranger

When an in home care franchise opens, their clientele isn’t a bunch of strangers — at least, not for long. You’ll get to know each and every family you serve, and you’ll have a positive impact on their lives as you help them through the parts of their everyday lives that they’re not prepared to handle themselves. These are often folks that are trying to avoid being consigned to a nursing home, and your efforts are a big part of their ability to remain in a home they’ve loved for years.

Ties that Bind

Being the company that is offering the highest quality care to the families of a community puts you in a unique position — as someone who can create a community. By connecting families and individuals in the same area who have similar needs, you can help them look after each other. If, through your in home care franchise, you can inspire and work with the people you serve, you can have an enormous impact on the quality of life of an entire community.

Support the Local Economy

Seniors, more than almost any other group, are likely to know and use the services of local businesses when given the opportunity. By providing for the day-to-day needs of your clientele — especially if you provide transportation services — you’re providing them the tools (and time) they need to be responsible local patrons. Without assistance like yours, they are more likely to turn to delivery services or other options that are less likely to be helpful to the local businesses. Add to that the fact that you’ll be employing local people to do the work your clients need, and your community will have every reason to love you.

If what you want is to profit at any expense, there are definitely more purely profitable ventures in the world. But if what you want is to love your job and have a group of clients that loves you, too, an in home care assistance franchise might be exactly the business for you.

The senior care industry is booming right now. With Baby Boomers entering full retirement and over 10,000 Americans turning 65 each day, this trend will continue for several decades to come. Finding the right home care assistance franchise can take some work; there are dozens of companies and business models out there to choose from. The best place to start is to work with a franchise broker who has access to several of the top franchisors in your area. This way, you work with an objective party that helps you determine the franchise opportunity that best fits your skills, needs and budget.

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Cleaning Franchise Opportunities: Are They Right For You?

If there’s one thing that’s universally true, it’s that anything people actually use on a regular basis gets dirty. There’s just no avoiding it — which means there’s no avoiding the need to clean up. Of course, it takes a special kind of person to enjoy cleaning up, which means there’s always a big market out there for cleaning services. That’s where you could come in — cleaning franchise opportunities give you the ability to pilot a business that cashes in on other people’s time crunch…or, let’s be honest, their simple lack of desire to clean up!

What Makes a Good Cleaning Franchisee?

Many potential owners are scared away at the thought of cleaning — no one wants to spend their mornings and evenings attending to all of the details of a business only to have to spend their days scrubbing, dusting, and wiping. Fortunately, that’s not actually how it works. The franchisee’s job isn’t to do the cleaning — it’s to keep the business running in the background. The cleaners are all employees. A cleaning franchisee needs to be:

  • Willing to Be Part of a Community: According to Greg Nathan, a columnist for Franchise Magazine, two of the top three factors that determine a cleaning franchisee’s success are based on their social presence: you have to not only reach out into your local community and make connections, but (for almost every cleaning franchise) you’ll gain a lot by participating in the community of your peers. Other franchisees that you meet during training and online are an enormous resource in this sector; being willing to turn to them with questions and advice is huge.
  • Financial Skills: The third factor? Financial ability — being able to determine how much you can spend, how much you need to make, how many hours you have to bill to meet your bills, and how much you can afford to spend on marketing and other growth efforts. Without a solid background in accounting, budgeting, and other basic financials, no amount of following directions and community connections will get you through until you start turning a profit.
  • Managerial Skills: Instead of putting your efforts into constant micromanagement, put a lot of effort into hiring the best possible employees — and then trust them to do their jobs. Compensate them fairly, and offer meaningful perks for top- or over-performers. This one ability will determine whether you’re constantly harried or merely very busy.

What Makes a Good Cleaning Franchiser?

When you’re looking for the right franchise to take on, you might be focused entirely on the bottom line: how little can you invest, how quickly you can start making a profit, etc. — don’t. The best cleaning franchisers aren’t those who focus on instant profitability; they’re the ones that focus on the factors that drive real-world business success.

Pick a franchise with a well-defined, recession-resistant niche that isn’t already filled in your community. Choose one that offers a well-developed training program with ample support built in after the initial training. And more than anything else, select a franchise that is picky — the more selective they are about their franchisees, the more likely it is that being chosen means you’re a good fit and are likely to succeed.

Where to Start

The best way to get started finding your ideal cleaning franchise is to speak with a franchise broker who works with several of the top cleaning franchise opportunities in the industry. Rather than deal with numerous company franchise recruiters trying to sell you on their brand, it is best to work with someone who is objective and can help identify the best franchise opportunity to fit your needs, skills and budget.

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Financing a Franchise: the Real Costs

When you start looking into a franchise deal, you’ll find any number of sources that quote numbers claiming to be the “total cost to start up,” or some similar number. Without offering any disrespect to the financial experts and researchers who come up with these numbers, let’s simply point out that there is a huge difference in startup costs between, for example, opening a McDonalds in San Rafael, California vs. opening the same store in Ardmore, Oklahoma. With location being just one factor involved in financing a franchise, you can imagine that these numbers are, at best, educated guesses.

So if you can’t get a reliable estimate of the real costs of financing a franchise, what can you get? Well, you can start by at least getting a grip on what the real costs of starting up a franchise consist of.

Typical Costs of Starting a Franchise

  • Attorney Fees: to have a skilled lawyer look over the franchising contract and all related paperwork.
  • Accountant Fees: to have a skilled accountant prepare financial projections and other related paperwork.
  • Licensing Fees: to acquire the necessary licenses to do business in your state and community.
  • Certification Fees: to acquire any certifications (trade industry certificates, food safety certificates, etc.) necessary for you to do business.
  • Structure: to either build or lease a place to do business out of. Can also include landscaping, signage, alarm system installation, and more.
  • Equipment: to purchase or lease the basic equipment (non-consumable goods) you need to do business. Includes uniforms, manuals, and vehicles as well as more obvious items like deep fryers or computers.
  • Inventory: to purchase the starting inventory (consumable goods) that you’ll need to do business.
  • Freight costs: to get all of that equipment and inventory to your store.
  • Insurance: to acquire the various kinds of insurance (general liability, property, business owner’s policy, workman’s compensation, professional liability, commercial auto, directors and officers, data breach, commercial renter’s insurance, key employee insurance, and more!) you’ll need to do business safely.
  • Training: to make sure your employees know how to do their jobs by the time the doors open.
  • Franchise Fee: to obtain the right to use the brand name, business plan, and other assets provided by the franchisor.
  • Initial Advertising: to pay for the ‘alpha strike’ of advertising designed to make sure that there are customers at your door when it opens for the first time.
  • Emergency Fund: most franchisors require you to have 3-6 months of ‘backup funds’ set aside in a special account before you open your doors.

The Franchise Disclosure Document (FDD)

Fortunately, while the numbers you’ll see when you start your own research will vary, every franchisor is required by law to offer a FDD; a document that lists everything you’ll be required to pay, and does so in a way that gives you data accurate to your situation. You might not obtain the document when you first show interest, but they are obligated to give you an FDD at least 2 weeks before you sign the franchising contract, so you can get an idea of how easy it will be to finance your franchise.

The costs involved with financing a franchise are critical in determining whether you have the financial wherewithal to make it through the startup phase and begin turning a profit. Though traditional franchises such as fast food restaurants and automotive centers can be very expensive, there are other emerging industries, such as senior care and home-based sales franchises with minimal startup fees and high profit margins.

To find the best franchise opportunity to fit your passion, skills and budget, and to gain help with franchise financing, it is best to work with a franchise broker. At Franchise City, we are under contract with over 500 of the top national franchise brands across a wide range of industries. Through a unique and proven process, we help match candidates with their ideal business. There are no extra fees and there is no pressure to buy into a franchise; we offer our unlimited consulting services free of charge.

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A Brief Q&A on Franchise Funding

E2 VisasQ: Why is a franchise easier to get funded than a new business?

A: Simply put, franchises are less risky than new businesses. Franchises tend to come with established brands that already have a proven model and several-to-thousands of success stories already on the books. For that reason alone, any bank that has a ‘franchise unit’ or ‘franchise underwriters’ will be far more likely to finance you if you come to the table with a solid franchise plan compared to someone claiming that they can create success without a proven roadmap and existing brand positioning. In fact, if you don’t have a solid franchise plan in hand, or you talk to a banker that isn’t part of a franchise-oriented department, the chances are very good that the bank will insist that you have 100% collateral available before they give you any financing at all — which means you would have the option of paying out-of-pocket and skipping financing altogether.

Q: If I can afford to pay for a franchise out-of-pocket, why would I pursue financing?

A: Two words: leverage, and security. One of the key concepts behind maximizing your long-term profitability is called leverage: being able to invest more money than you actually have into a venture. The idea being that the more you can invest up-front, the shorter the total time-to-profitability, and thus the greater the long-run profit. At the same time, the most common problem in running a franchise is failing to have enough money in reserve to make it to the break-even point — and financing allows you to keep a greater amount of cash in an emergency fund than paying for everything up-front.

Q: How much should I borrow?

A: Wrong question. Instead ask ‘How much do I have to borrow?’ In balance to the last question: the more you borrow, the greater the impact if your venture fails — and you must account for the chance that you will fail. The point of financing isn’t to overleverage; it’s to maximize your chances of success by being amply-funded while also not taking on so much risk that a failure will drive you into bankruptcy. This is where a rock-solid business plan based on highly-conservative financial projections comes into play; with those documents and an experienced accountant, you should be able to reverse-engineer a loan that optimizes your chance for making a modest living in the short-term, breaking even in a secure and reasonably swift manner, and collecting a (hopefully somewhat immodest) profit down the road.

Q: Are there options beyond a simple bank loan?

Of course! Even within the ‘traditional’ banking system, there are several levels of financing that you can access. Then of course there are the many non-bank sources of financing you can approach:

  • The Small Business Administration and other business-related (usually State) organizations insure small-business loans to franchise owners. Technically, the loan still comes from a bank, but with the SBA’s backing, you’ll be far more likely to obtain financing.
  • Some franchisors will offer financing through an in-house system. Compare options carefully, because some can seem like traps for the unwary, but most are fair.
  • Other non-bank lenders can be extremely challenging to properly assess. The best advice is to inquire at your local Small Business Development Center and double-check a non-bank lender in the Better Business Bureau before you delve into that realm.

Funding is obviously one of the major considerations you must evaluate when deciding whether or not to purchase a franchise. Other considerations include skills, passion and interests. Many franchise recruiters will try to persuade you to buy into their brand simply because you are financially qualified. However, this is not always the best advice. It is much better to speak with a franchise broker who has access to hundreds of national brands across a wide range of industries and can objectively analyze which Best franchise opportunity is right for you.

At Franchise City, our brokers use a unique and proven 20 step process to match clients with their ideal business opportunity. There is no fee for our service and the franchise fee is the same whether you go through a broker or the company recruiter. For further information about franchise funding and all other aspects of franchising, contact us by filling out the form below.

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Writing Your First Franchise Business Plan

Creating a franchise business plan is a crucial step in determining whether or not you’re going to ‘make it’ as a franchisee. Many potential franchisees think of this step as an ‘entrance exam;’ a test to see if your planning skills are up to snuff. This is more-or-less exactly the wrong way to think about it: it’s not a test — it’s an opportunity for you to actually sit down and think hard about what assets you have on your side, what challenges you can expect to face, and how you’ll overcome them and achieve a steady profit flow.

Each section of the business plan introduces a new area of opportunity for you to plan out:

  • Introduction: Asks you to identify your primary products and/or services, the level of competition in your local market, the operational techniques used to achieve success, and a broad-strokes description of your key risks and challenges. This is your chance to fully assess the competition and ask yourself fundamental questions about the nature of the challenges ahead of you —       a key part of addressing those challenges (later in the plan.)
  • Management: Asks you to identify the key management roles in your enterprise and introduce the people who will be filling those roles. With each person, in addition to stressing generic qualifications, ask yourself if the individual has a skillset or other attributes that can help you tackle your main challenges or mitigate your main risks. Describe those attributes and explain why they’re valuable to you!
  • Marketing: Asks you to describe how you’re going to attract new customers to your franchise, including explaining the competitive advantages you have over local business in the same industry. Also asks you to describe how your product or service provides value to your customers, and how your initial marketing push will drive you toward profitability. This is where you should be sitting down and honestly asking yourself about who you expect to be marketing to — essentially, who you consider your ‘core audience.’ This decision should guide a significant portion of your business decisions and also point you toward certain answers for your key challenges.
  • Financial Projections: The most important part of the franchise business plan from the number-crunchers’ perspective: the cash flow statements, balance sheets, cost projections, and other numbers that will ultimately lead to a projected “time-to-net-profit” (which should be somewhere between 1-3 years.) Prepare these as conservatively as possible, because a new business — franchise or not — will always encounter unforeseen problems and issues. The more ‘wiggle room’ you give yourself by preparing conservative projections, the more likely you are to survive until profitability and thus achieve the goal of having a steady income stream.
  • Financing Needs: No matter how you’re financing your venture — even if the answer is “it’s all coming from my savings account” — always provide a complete analysis of all of your startup costs, from your initial marketing surge to all of the projected operating losses you’ll accrue until you achieve profitability. This process will give you even more insight into what stumbling blocks you might encounter as well as inspire you to awareness of alternative financing sources should you turn out to need them.

One of the great rules you will do very well to remember as a franchisee is that every problem is an opportunity in disguise; including this first, fundamental challenge of writing your franchise business plan. Take it on, make it the opportunity it can be, and learn everything you can by doing the best job you’re able, and you’ll be far more ready and able to deal with the challenges of creating a profitable business.

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