Greater Baton Rouge Business Report:
As the Capital Region has grown, so has the number of franchised small businesses. Franchises are more likely to pop up on the landscape in daunting economic times because acquiring startup financing can be much easier with the proven business plan behind the company name.
Just ask Christopher Womack, the owner of two franchises of The Melting Pot, one on Corporate Boulevard and one in New Orleans. He says opening a franchised restaurant was a much smarter move than attempting to open his own restaurant.
“What it does is allow you to get capital that you wouldn’t get otherwise,†he says. “It just shows you have to have a proven business model. Whereas if I wanted to finance Chris’ Fondue Place, no one would finance me.â€
According to franchising information on The Melting Pot’s Web site, financial requirements necessary for approval include an initial fee of $35,000, initial cash investment [nonfinanced] of $250,000 to $300,000 and additional financing ranging from $727,845 to $1,494,395 or more—depending on the site, market area and buildout costs. The total combined net worth minimum is $500,000.
And these days, easy access to startup capital is essential for businesses. The Missouri-based Kauffman Foundation released a study last month detailing the nation’s entrepreneurial statistics, including information regarding capital sources for small businesses.