The New Unwritten Laws Of Lending

Pizza Marketplace.com:

Large institutions are rarely funding anything these days but the largest restaurant chains.

That leaves regional banks to do the lending for mid- to smaller-sized chains in need. The problem is, most regional banks don’t know how to spell the word “franchise,” industry execs joke.

Part of the challenge is a perception issue, said Marco’s Pizza CFO Ken Switzer. He had been speaking at a conference on franchising last February in San Antonio, and was approached by a skittish lender afterward. The lender told him that he was wary of lending to pizza chains because he had a bad experience with a national concept whose leadership regarded franchisee failures as the bank’s problem. “I have a hard time getting a Marco’s program through my credit committee now because of that,” the banker said.

Switzer asked him, “Did you ever have a bad dinner? And do you still go out to eat?” Read on.

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