Kaufman & Forman, P.C.
Call to arrange a consultation
678-957-7769 | 770-390-9200
Contact Us
practice areas

Funding a franchise may be difficult; but it's doable

As both businesses and consumers in Atlanta are likely well aware, the economy in recent years has not been robust. That's made it tough for those seeking loans or financial assistance to get the funds they need.

The same may be true of those looking to launch franchise businesses. Recent reports indicate that lenders are not making it easy to secure loans. The idea of starting a franchise business operation is very appealing in today's tough job market. Many people who are unemployed are looking to franchising as a way to start fresh.

One recent example of this lending crisis is the story of a man who wanted to start a franchised urgent care facility. First, the man suffered through his home equity line of credit being frozen. Second, he couldn't get a bank to issue him a loan. It took over a year for the franchising hopeful to find a solution.

What the man found is that lenders are not completely open to new franchise buyers and may deny requests for financing based on lack of experience. In this man's case, the banks shied away because of the specific nature of the franchise opportunity - an urgent care center.

He had the money to get the franchise, but he needed $1.2 million in additional working capital. He finally cobbled together what he needed by obtaining a loan from the Small Business Administration for $575,000 and tapping his savings and 401(k) account. The amount that he needed in total was to cover capital, construction, and equipment costs.

The issue of financing for those wanting to start a franchise in Atlanta goes beyond just lender difficulties. In today's economy, credit scores do not amount to what they did in years past, so entrepreneurs and franchise hopefuls have to bring more creative insight to their planning. That may be facilitated with help from a legal professional with experience in the franchise market. Ultimately, the process of starting a franchise may present challenges and complexities, but it can be successful when the right tools are employed and all the available options are considered.

Source: The Boston Globe, "Getting a loan to open a franchise is getting harder," Joyce M. Rosenberg, AP, Aug. 30, 2012

No Comments

Leave a comment
Comment Information

Contact Kaufman & Forman, P.C. Now

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy

get Legal Help Now

Kaufman & Forman, P.C.
8215 Roswell Road
Building 800
Atlanta, GA 30350

Toll Free: 800-461-5864
Phone: 678-957-7769
Fax: 770-395-6720
Atlanta Law Office Map

Review Us

Robert Kaufman has been selected as a 2013 Top Rated Lawyer in ‘Commercial Litigation’ as will be published in the May issue of The American Lawyer & Corporate Counsel magazine.Alex Kaufman has been selected as a 2013 Top Rated Lawyer in ‘Commercial Litigation’ as will be published in the December issue of The American Lawyer & Corporate Counsel magazine.

*AV Preeminent and BV Distinguished are certification marks of Reed Elsevier Properties Inc., used in accordance with the Martindale-Hubbell certification procedures, standards and policies. Martindale-Hubbell is the facilitator of a peer review rating process. Ratings reflect the confidential opinions of members of the bar and the judiciary. Martindale-Hubbell ratings fall into two categories: legal ability and general ethical standards.