Ike Steele, owner of LINK Staffing, attributes 50 percent of U.S. retail sales to franchises, and credits the practice with his company's impressive growth rate. Without franchising, we'd be two-thirds the size we are now. However, franchisees are rarely prepared for the degree to which owning such a business can turn a life upside down. It is extremely difficult, regardless of business and family preparation, to adjust to the emotional highs and lows. Perhaps the most difficult aspect of owning a franchise is securing the money that is often necessary up front.
Banks typically avoid small-business loans, unless circumstances call for it.
David Surface, a commercial real estate broker turned Smoothie King franchise operator, suggests talking to family and friends, or even running an ad in a newspaper, to try and secure capital. Banks that might consider giving loans will be looking at the amount of equity the owner puts into the business, the owner's business experience, the marketing plan and how quickly the franchise might grow.