Financing and small business loans are once again top of mind for franchisors as the credit crunch continues to impact many industries. Some franchisors are struggling to put additional resources in place to assist franchisees with finding loans, as pointed in out in a recent Wall Street Journal article. However, for Baltimore-based franchisor Kiddie Academy, the processes they’ve had in place stood strong against the financial crisis.
While other franchisors may have struggled to find financing and keep locations opening, Kiddie Academy was able to slightly adjust their model to help secure loans at a more local level. Prior to the credit crunch, most businesses solicited loans from a handful of major national lenders. Once those lenders dried up, it was necessary to find banks at a more regional or local level — an active approach that Kiddie Academy had adopted already.
According to Michael Miller, CEO and president of Kiddie Academy, their finance department has a team of people that not only thoroughly, and painstakingly, review a franchisee’s pro-forma and business plans, they also facilitate conversations with regional and local banks, in addition to the national lenders.