More than half of franchising companies provide some franchisee assistance in obtaining financing to buy or run their units, according to a report from the International Franchise Association Educational Foundation and Frandata.
Just 20% of franchisors offer direct financial assistance through a formal financing program, either from the franchisor itself or 3rd-party lending and leasing institutions, according to the study, ‘Profile of Franchising Study: 2006.’
20% of franchisors have signed up for the Franchise Registry Program of the U.S. Small Business Administration, which provides a streamlined process for franchisees that apply for SBA-guaranteed loans through private lenders.
The IFA is a Washington, D.C., trade group whose membership includes more than 1,000 franchisors and several thousand franchisees. Frandata is an Arlington, Va., research firm.